Spanish builder Realia Q1 falls as land sales slump

MADRID, May 12 (Reuters) - Spanish house builder Realia (RLIA.MC: Quote, Profile, Research) posted a 36 percent fall in net profit for the first quarter on Monday, reflecting a sharp downturn in the country's property market.

Realia, about half of which is owned by construction group FCC (FCC.MC: Quote, Profile, Research) and publicly owned bank Caja Madrid, said net profit fell to 26.7 million euros after it sold 86 percent less land than in the first three months of 2007.

It blamed that on tighter credit conditions for potential customers.

Higher interest rates, oversupply, the global credit crunch and racing prices that have pushed housing out of the reach of many have combined to bring Spain's 10-year housing boom to an abrupt halt.

Despite this, Realia increased house sales by 127 percent, though it warned it had cancelled some projects and the value of its order book had fallen to 251 million euros from 334.2 at the end of 2007 and from 540 million 12 months earlier.

"Due to the difficulties buyers are having in obtaining financing and by the cancellation of various developments for operational reasons, this has resulted in a series of cancellations in the pre-sales order book," the company said in a statement.

The rise in house sales and a 10.7 percent increase in revenues from its rental business could not compensate for the sharp fall in land sales, and overall revenue fell 27 percent to 152.9 million euros.

The firm said debt had risen to 2.089 billion euros from 1.97 billion at the end of 2007 due to financing for new projects. (Reporting by Carlos Ruano; Translating by Ben Harding, editing by Will Waterman)