Amercian executives from Paramount Licensing who visited Murcia on 11 November 2010 have confirmed that the new Paramount theme park will be located in Alhama in Murcia. The land adjacent to Condado de Alhama resort has been widely reported in recent months as the preferred location for the new European theme park set to rival Disneyland Paris. (Paramount Murcia background). One other location in the county of Alhama is thought to be under consideration.

 

Does this present a buying opportunity with the hugely discounted prices now at Condado de Alhama? It's a project that is likely to boost property prices for second homes throughout the Murcia region and on the six Polaris World Resorts all within 30 minutes of the location of the new theme park (wherever it is situated). The scale of the project is immense. 

Until recently Paramount were to build this facility in Dubai. The collapse of the economy and property market in Dubai soon put a stop to those plans. Enter Murcia, just two hours away from 300 million people in Europe. With over 300 days sunshine a year and with winter temperatures of 60 - 70 degrees it is the ideal location. An area two kilometres wide is needed to accommodate the theme park, related hotels and facilities that follow these projects. Enter Alhama with an ideal location offering of six million square metres of land right next to Condado de Alhama resort just twenty minutes from the new Corvera international airport set to open in 2011. It all adds up to an obvious choice of location in Europe for a project of this scale and ambition.

 

The Paramount project is expected to attract 3 million visitors a year to Murcia and requires 15,000 hotel rooms. A requirement that will rapidly soak up any hugely discounted properties left over - starting with the best bargains first.

 

Looking at prices, take the example of a two bedroom apartment with roof top terrace at Condado de Alhama.

 

 

On launch these properties were sold off plan by the developer Polaris World with nothing but land at Condado de Alhama and no thoughts or plans for any theme park. They started at €119,800 and they sold fast - over 1000 apartments reserved in the first six months of launch.

 

 

The credit crisis slowed the sales rate right down but the resort was already funded and built. There is now no property construction on the resort, 2500 properties are complete with over 2200 sold and occupied. There's a stunning town centre and fabulous Nicklaus Signature golf course open (one of only three in Spain). Construction of the clubhouse starts soon.

 

Stepping back, is it unreasonable to assume that something that sold off plan for €120,000 in 2005 should sell for say, €160,000, or far more, perhaps ten to ffteen years later when the resort is constructed AND they have built the second largest theme park and studios in Europe right next door! Perhaps not unreasonable by 2015 or 2020 once the last remnants of the credit crisis are fully behind us.

 

If so, then anyone who picks up the last of the bargains today at €80,000 could be looking at a 100% gain or more within five to ten years. Buying a property at depressed prices of €80,000 to €90,000 now with a 90% mortgage at just 2.5% pa may not pose a huge risk in itself. Quite the opposite and an opportunity as the market recovers, with or without a Paramount theme park and studios on the doorstep.

 

There are less than 40 properties on the market below €95,000 at Condado de Alhama and just a handful left now at €80,000. In two years from 2005 to 2007 Polaris World sold over 2,000 properties at Alhama - that's 20 per week and more than 40 per week in the first six months of launch. We have seen a big pick up in activity across the board in the last 12-18 months as opportunism replaces fear as the main emotion with buyers. Many of the properties on sale now are owned by four banks - who just happen to be the same four banks likely to sell the land at Alhama to Paramount for €325 million.

It is not just Condado de Alhama that will benefit from the theme park. There are five further resorts between 20 minutes and 40 minutes from the Alhama location. Condado de Alhama offers the most affordable property on any of the resorts (starting at €79,995). However Hacienda Riquelme has some fabulous deals at typically 40% discount, Terrazas de la Torre offers frontline golf from just €95,000 with 95% mortgages and Mar Menor large luxury two bedroom two bathroom apartments with 100% mortgages and two and three bedroom villas.

 

Once the deal with Paramount is signed we expect the banks to capitalise on the interest and increase the prices of their stock quickly. There's then likely to be a steady rise in prices for several years until completion of the theme park.

 

It's a myth that the banks are in a hurry to sell....they are not. As the largest seller of property on the Polaris World resorts we work closely with all the banks and barely a day goes by when a client makes an offer for a property thinking the bank will bite his hand off! It is possible to offer the reserve price but no lower. The banks are holding assets which they firmly believe are undervalued and will sell for far higher in the coming years.

 

Perhaps the imminent deal the banks may do with Paramount has something to do with this. But then prices are already discounted by 30% - 40%. The banks look to get back the outstanding mortgage value on the property, no less. In the last recession of the 90's banks in Spain held a large property portfolio and made huge gains when the market turned around in the subsequent boom. Maybe buyers today can do the same.