A blow to buyers and suppliers of (luxury) homes on the Costa del Sol. Otero Group is one of the larger real estate construction companies on this Spanish costa and is in financial trouble. Consequently, suppliers are demanding their debts are settled, and buyers are left empty-handed.
The construction group has stopped all payments and is suspending work. Furthermore, it has been apparent for some time that the company’s debts to suppliers were piling up. Consequently, construction workers stopped their work last week.
Company had expansion plans
The establishment of Otero Group took shape in 2017 and has grown significantly since then. The company’s turnover increased from €25 million in 2018 to more than €500 million in 2022. The initial thirteen employees grew in a few years to a workforce of more than 130 people.
The Otero Group has a huge number of luxury villa projects in different parts of the Costa del Sol. Moreover, the company had plans to expand to the rest of Spain. But due to mounting debts to suppliers, the company’s future is now uncertain. Especially since employees have also laid down their tools. According to the Spanish newspaper El Confidencial, the company’s debts now run into millions of euros.
Buyers do not automatically receive a refund
Suppliers to Otero Group are not sure whether their invoices will ever be paid. Also, buyers, whose homes are unlikely to be completed in the short term, are left with a great deal of uncertainty. In many cases they have already made the investment but they do not know whether, how and when they will ever receive their home.
A lawyer, who specialises in real estate, says it will be difficult for buyers to get their money back. In many cases they have signed a contract that includes protection clauses for both parties. When Otero Group files for bankruptcy, as some are starting to suspect, the chances of getting money back will be even more complicated.
In addition to the luxury villas, Otero Group also helped build the so-called District Z in Málaga. This is a new district with the most modern, sustainable and technological gadgets. Together with Iberian Yield Investment AB, Otero Group announced the construction of a thousand affordable rental homes, the first ninety of which were to be delivered this year. Moreover, this project is also currently in the air.
Taking matters into their own hands
Apparently things have been rumbling within the company for months, but at the beginning of February problems became painfully visible. At that time, suppliers of insulation materials and scaffolding sent trucks to collect the delivered goods from the construction sites. More and more construction workers were not showing up for work. Both buyers and local residents wonder who will finish these places and what will happen to the concrete skeletons that have now been left behind.
Some suppliers and buyers have engaged a lawyer and are currently considering legal action. As mentioned earlier, this becomes difficult given the protected clauses in the signed contracts. The fact that the construction company itself only releases sparse information and hardly speaks to anyone, does not make matters easier.