Bloomberg News

Urbis Says Full-Year Profit Climbs 39% on Home Demand (Update2)

March 01, 2006

Inmobiliaria Urbis SA, Spain's third- largest real estate developer, said full-year profit jumped 39 percent, helped by demand for homes.

Net income rose to 148 million euros ($177 million) from 106.7 million euros a year earlier, the Madrid-based developer said today in a filing. Revenue surged 42 percent to 888.7 million euros.

Low interest rates, rising employment and economic growth have boosted demand for homes and house prices in Spain. Urbis expects price growth will now slow as property becomes less affordable.

``Spaniards continue to buy homes, more households are being formed and there is greater wealth and purchasing power,'' Urbis said in a statement. ``Accumulated price increases have begun to draw back demand in the more expensive and elastic segments.''

House price increases will be closer to the rate of inflation, Urbis added.

Shares of Urbis jumped 90 cents, or 5 percent to 18.85 euros in Madrid. The stock has advanced 22 percent this year, giving the company a market value of 2.4 billion euros.

Urbis had forecast net income would rise more than 30 percent in 2005.

Revenue from home sales surged 44 percent to 710 million euros, accounting for about 80 percent of total revenue. Land sales increased 16 percent, while revenue from the rental business added 4 percent. Urbis also reported asset sales of 29 million euros.

Santander Central Hispano SA, Spain's biggest bank, owns 51 percent of Urbis via the bank's Banesto domestic banking unit. Builder Actividades de Construccion & Servicios SA, or ACS, holds a stake of about 24 percent.

To contact the reporters on this story: Joao Lima in Madrid at jlima1@bloomberg.net.

To contact the editor responsible for this story: Chris Jasper at cjasper@bloomberg.net


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