Villa Development in Marbella & Estepona: 8 Essential Steps

Title image: archive Villas Fusion development visualisation superimposed on an aerial photograph.

Villa development in Marbella and Estepona starts with a question: can you build a home that buyers want, at a total cost that leaves an acceptable return?

Whether you are considering one villa or a small villa development, the same sequence applies. Establish what can be built, test the market, budget the complete project and understand when cash will be needed. Here is a practical framework for Marbella and Estepona, with an El Campanario example.

1. Check the land for villa development

A plot’s size does not tell you how much you can build. Ask your lawyer and architect to verify title, charges, boundaries, permitted use, buildable floor area, dwelling numbers, setbacks, height limits and infrastructure obligations. Check access, utilities, topography and whether further planning or urbanisation work is needed.

Confirm the actual municipality. A property marketed as being in the Marbella area may fall under Estepona or Benahavís, with its own planning framework. Existing drawings and historic permissions should be checked against the current position.

Decision point: do the development rights, site conditions and likely selling prices support your intended product?

2. Work backwards from the buyer and selling price

Define the buyer before fixing the design: a family seeking a permanent home may value a different layout from someone purchasing a holiday villa. Compare homes with similar plot sizes, specification, outlook, location and completion status.

For El Campanario, developments such as Sanctuary, Belfry and Vasari provide useful research candidates. Asking prices show the competition; verified transactions provide stronger evidence of what buyers actually pay. Check availability, price changes and sales pace directly rather than assuming that a listing remaining online means a home has not sold.

Compare price per square metre only when the area definitions match. An advertised built area that includes a large basement is not directly equivalent to above-ground accommodation. Keep terraces and plot area separate.

3. Budget villa development costs and professional fees

Beyond the agreed land price, allow for applicable acquisition taxes, legal due diligence, notary and registration costs, and any acquisition fees. Have a tax adviser establish the transaction’s treatment: recoverable VAT affects cash flow differently from a permanent cost.

Request written scopes and fee proposals for the architect, technical architect or aparejador, surveys, engineering and project management. The architect develops the design and architectural direction; the technical architect typically handles execution direction and quality control. Health and safety coordination and specialist services should be identified explicitly.

Ask whether each proposal covers concept design, the licence project, detailed construction documents, site involvement and completion. There is no single fee percentage that reliably captures every project.

4. Understand the design and licence stages

Andalusia’s regulations allow a building licence to be granted on a basic project, while requiring the relevant execution project and start documentation before works begin. The stated decision period is three months from a complete application, subject to permitted suspensions. This is a legal procedural deadline, not a dependable promise of delivery. Do not assume that silence authorises a new villa. Your architect should confirm the route for the site. See the Andalusian planning regulation, particularly articles 299, 304 and 310.

5. Estimate construction by scope, not just floor area

A published local architect’s broad benchmark for a quality villa is €2,500–€3,500 per square metre. For a hypothetical 350 m² home, that produces €875,000–€1,225,000 before resolving the exact scope and exclusions. This is an early screening reference, not a contractor quotation or an all-in development budget. Source: Federico Cappellina’s Marbella construction guidance.

Price above-ground accommodation, basement space, terraces, pools, landscaping, retaining walls and utility connections appropriately. Confirm whether contractor overheads, external works and VAT are included. Obtain comparable tenders using the same drawings and specification.

6. Put time and cash flow into the feasibility study

Build a villa development programme covering due diligence, design, the application, procurement, construction, completion formalities and sales. Ask the architect for a current local assessment of permissions and the contractor for a programme tied to the design. A single villa and a 15-villa scheme should not automatically share one timetable.

For an initial sensitivity exercise, you might model three, six and twelve months for the application stage and twelve, eighteen and twenty-four months for construction. These are alternative modelling assumptions, not verified local averages or promises. Add design and completion periods separately and replace the assumptions with project-specific advice.

Before construction, confirm funding, contracts, insurances, site arrangements and necessary approvals. During the works, track progress payments, variations and contingency. Allow for snagging, completion certificates, applicable occupation formalities, utility connections, registration and handover.

Prepare a monthly cash-flow schedule. Include interest, lender fees, holding expenses, marketing, agency costs and any required buyer-payment guarantees. For villa development, the funding question is the peak cash requirement before receipts arrive, not just the final profit.

7. El Campanario: a villa development example

The opportunity under consideration comprises 15 remaining plots, with a seller-stated combined area of 9,751.01 m² and an asking price of €8 million. There is no current building licence. Development rights, the suitability of existing plans and the current application requirements must be confirmed.

Villa Noble previously commercialised homes in the original development under the Villas Fusion name. That experience provides local context; today’s proposed homes still need to be assessed against current buyers, specifications and comparable evidence.

The next step is to match the permitted design and proposed villa sizes to a complete budget and a supported selling-price range. An equal land allocation is useful for initial screening; individual plots and finished homes may have different values.

Request the Campanario dossier

Mention “Campanario” in your enquiry and tell us your investment budget and preferred timeframe.

8. Calculate the margin, then test what could change

Villa development profit before profit taxes equals sales revenue excluding buyer taxes, less total development costs. Margin on revenue divides that profit by revenue. Return on cost divides it by cost. Neither measure is the same as an annualised return on your equity.

Also test a six-month delay, slower sales and additional infrastructure costs. Work backwards to a maximum affordable land price: expected revenue, minus non-land costs, required profit and land acquisition costs. If the result does not support the purchase price, revisit the price, product or project assumptions before committing.

Looking for a development opportunity that fits your budget?

Villa Noble can discuss development land opportunities, including off-market options, from smaller villa projects to larger schemes. Tell us the scale and location you are considering so we can assess what may fit.

Find development opportunities

In your message, include your approximate total project budget, whether this includes construction, preferred area, project size and buying timeframe. We will use that information to discuss relevant opportunities with you.

This guide provides a framework for initial assessment. Site-specific planning, legal, tax and construction advice is needed before an investment decision. Costs and programme assumptions should be refreshed for each project.

Article by Louis Wittner

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