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January 3, 2017

A good year for the Spanish real estate market

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A good year for the Spanish real estate market

The Spanish real estate market in 2016 received a good quantity of investments and until the end of the year the total volume of investments will amount to between 8,000 and 9,500 million euros. Among the types of real estate in Spain it can be said that the retail sector has attracted the highest amount of money, more specifically the offices and shopping centers.

Among the most important operations, therefore, are the sale of the Diagonal Mar shopping center, of the building Edificio España, or the purchase of the Torre de Cepsa, which was carried out by the owner and founder of the Inditex Group, Amancio Ortega.

In addition, industry experts predict that by the end of this year investments in real estate in Spain will amount from 8,000 to 9,500 million euros. Although this is below the figures recorded in 2015, which was a record for these indicators. Meanwhile, the decline in the volume of investments in the Spanish "brick" is explained by the consolidation of the recovery of the national real estate market. But at the same time, experts point out that the data remain positive and is a clear proof that investors continue to show interest in Spanish properties.

According to the forecasts of the most optimistic consultants and real estate agencies in Spain this 2016 will be closed with an investment of 9,500 million euros. In addition, the main agencies and real estate consultants in Spain agree that many of the transactions with buildings in Spain were closed at the end of the year and, therefore, they have not yet been officially published.

If we consider more accurately the type of investor, in this case, the foreign buyer clearly predominates, although the national investor is also starting to be active and already represents 43% of the total investments during the first nine months of this year. The main players in the real estate market in Spain are Socimi societies, although a large part of their capital comes from abroad.

The Spanish real estate sector of retail trade, on the other hand, attracted the most considerable investment. This was mainly due to the larger size of the existing real estate assets and, therefore, a large number of operations. This particular sector captured 45% of the total investments made in buildings in Spain. The company Cushman & Wakefield claims that the main operations involved the sale of the Eroski corporate portfolio, the sale of the Diagonal Mar shopping center, as well as sales of the buildings of the Gran Vía de Vigo, of ABC Serrano, of L'Aljub and Festival Park, among others.

The office sector in Spain, for its part, took the 26% of the total investment this year, thanks to such large transactions as the purchase of Business Park Las Mercedes by Oaktree or the purchase of Torre Foster by Pontegadea. In addition, the industrial area and the buildings of the hotel sector in Spain continue to attract the interest of investors around the world, with 8% and 10% of invested capital, respectively. The acquisition of Hotel Skipper in Barcelona, ​​for example, has become the second largest operation in the second quarter of 2016 after the sale of the Diagonal Mar shopping center.

Investment funds were the most active buyers of real estate in Spain since 2014, representing 62% of the total assets invested in the country during the year up to September 2016, according to the Cushman & Wakefield report.

With regard to sales, real estate agencies in Spain play an important role in the national real estate sector, since they represent 16% of the total investments. The new strategy of many companies to raise capital through the sale of real estate assets is behind this high figure.

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