Usually the Japanese, Indians and Americans who visit Murcia’s La Manga Club are there to work on their backhands at its award-winning tennis academy, or to practice their putting on three of the courses that make it one the leading golf resorts in Europe. However, in late September, the international visitors were investigating the investment activities, and not the sporting opportunities, in this arid region on Spain’s south-east coast.
The Murcia Open Business Conference, hosted by the Murcia Regional Development Agency (Info), brought together potential investors from nine countries interested in sectors including tourism, agriculture, and commercial and industrial real estate.
The region of Murcia has grown more than any other region in Spain over the past decade and Salvador Marin, the regional minister for universities, companies and research, says that this is one of the reasons why foreign investors should take a serious look at the region. “Murcia is the best,” he jokes, when asked why investors should consider it.
But Mr Marin adds that part of the reason Murcia has been doing well is due to a concerted effort to bring new business to the region.
“We have carried out an important investment catchment plan, with the aim of diversifying our region and trying to drive investment,” explains Mr Marin. “We are focusing on getting in new investments, concentrating especially on businesses, the financing of projects and the expansion of existing investments,” he adds.
Mr Marin believes that the region leads the rest of Spain for several reasons, including the fact that start-up costs are less expensive than in other parts of the country; there are three universities in the region, with a total of 44,000 students, making it a prime location for R&D facilities; there are no labour or political conflicts so the region has stability; and, with that, comes less bureaucracy so projects can get off the ground more quickly.
Transport links to Europe and north Africa also help to make the region of Murcia an attractive investment destination. There are already two airports in the region and a new international airport, which will take in long-haul carriers, is due to be completed in the spring.
Airport authorities are currently in discussion with big international airlines, promoting the fact that the new airport will offer infrastructure to service even the largest of passenger planes. The airport will be a welcome addition to the region as airline traffic has grown from more than 180,000 passengers in 1999 to nearly 2 million last year.
Murcia also boasts the Port of Cartagena, which has two harbours – Escombreras and Cartagena. Escombreras harbour, which is used for industrial traffic, has two logistics areas – one fully completed and the other under construction – with 600-metre-deep quays used for docking large ships and unloading solid and liquid goods.
The harbour also includes regasification and desalination plants and an oil refinery owned by Repsol. Last year it was announced that the refinery was to be expanded at a cost of €3.2bn, making it not only one of the world’s biggest oil refineries, but also Spain’s largest ever single industrial investment.
Cartagena harbour is used for cruise ships and general shipping, including fruits, vegetables, iron and steel products. The long-term plan is to build a new marina a few kilometres further down from Escombreras where the general shipping will be delivered, therefore opening up Cartagena to more cruise ships which will provide a boost to the tourism sector.
With the Spanish real estate and construction markets decimated by the financial crisis – London-based economic consultancy Variant Perception said in a recent report that the value of outstanding loans to Spanish developers and construction companies stands at €470bn, which is nearly 50% of Spanish gross domestic product – Info considered that it was a good time to highlight the long-term investment potential for the region.
Mr Marin admits that these markets have taken a hit. “But our important investors are big investors so we’re focusing on different aspects. And if our investors see the quality is still there, then there are still opportunities,” he says. “[The market] is not what it was before, but we have tried to spin off these high-value sectors to promote them in a different light.”
Pedro Lopez, who with his wife runs the real estate development firm Lopez y Valiente, agrees: “It is not a good time for the construction sector, but maybe because of that you could say this is the time to be investing because the prices are so low.”
Lopez y Valiente was present at the Info conference, seeking to drum up interest in its plans to build a $21m two-tower business complex in the city of Murcia. The firm estimates that the complex will take five years to build, creating the tallest buildings in Murcia, with the capacity to employ 48,000 people in its offices, shops, hotels and restaurants. “In Spain it is very difficult to find investors so our principal aim is to find foreign investors, that’s why we are here,” said Mr Lopez.
Deep skills pool
With all of the talent at the University of Murcia, Cartagena Polytechnic University and San Antonia Catholic University (plus four other universities within 100 kilometres), Info hopes that science and technological parks will prove to be a good investment area. The aptly named Contentpolis is one such place; the digital content town has been set up to develop Murcia’s digital and audio-visual industries.
Divided into the three broad areas of creativity, production and leisure, it is anticipated that Contentpolis not only will gain a global reputation as a leading location for audio-visual design, but that it will also offer training and accommodation for some of the world’s leading talents and companies.
The 210-hectare campus will house editing and post-production studios, a centre for three-dimensional animation projects, a museum of digital imaging and an open-air auditorium. Innovation, however, does not come cheap: the estimated investment is €2.1bn.
Another project designed to draw on the region’s academic attributes is the Murcia Science Park. Although its developers have yet to break ground, promoters believe that this park will be one of Europe’s leaders for R&D and technology, accommodating private research companies, technology and scientific laboratories.
Drawing in visitors
Tourism, of course, remains a great opportunity for investors because, as Mr Marin says, the price of land in the region is cheaper than in other parts of Spain. Projects such as Villa Eulalia are hoping to take advantage of this. Dubbed by promoters as the first exclusive non-residential eco-resort in the Murcia region, the development is designed for senior citizens and will include 148 Spanish cottages located near to renovated vineyards, olive groves, Roman gardens and baths.
“We choose this region because we get 320 days of sunshine a year and we have the beaches of the Mediterranean and the mountains all within our view,” says Villa Eulalia’s Felipe Jose Mendoza. “It is the perfect locale.”
Another tourist project in the pipeline is the Marina de Cope resort. To be developed across 21 million square metres of land with a coastline of seven kilometres, it will include homes, exclusive hotels, an inland marina and golf courses. La Manga may soon face some competition.
Region of Murcia
Population: 1.4 millionPop. growth rate: 1%Area: 11,314 sq kmGDP: €28.2bnGDP growth: 1.5 %Exports: €4.57bnImports: €10.4bnForeign investment: €189.08mLargest sector (% of GDP): Services 66.7%