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“Real Estate Investment Will Cross €22 Bn in 2014”

26/06/2014 – Cinco Dias

Adolfo Ramirez Escudero joined CBRE in July last year, substituting Eduardo Fernandez-Cuesta as the head of the real estate consultancy division in Spain. The newly named president set the main target at doubling the size of the branch in only two years.

Asked what according to him is the most attractive feature of Spain for investors from all around the world right now, Ramirez tells there were two operations last summer that triggered the interest in the once-crashed Spanish market: the purchase of 1.860 houses for rent in Madrid (Blackstone & Magic Real Estate- transl. note) and the sale of 3.000 dwellings also in Madrid by Ivima to Goldman Sachs and Azora. Moreover, he points at the creation of Sareb and several governmental reforms that influenced the return of investors.

Speaking of the investment outlook for this year, CBRE Spain´s president reminded that during the 2007 peak, the investment reached a staggering €12 billion and then it went on declining until landing at meager €2 billion in 2010. “Last year, we registered a rise to €5 billion but in 2014, we need to re-define the measure: direct asset sales are to jump up but one shall also take under consideration the assets which have been thought uncomputable, such as the real estate debt. The “Octopus” solely amounts assets worth €4 billion, but there is also the “Hercules” and operations of Sareb. Altogether, the indebtness sales volume may hit €16 billion. The amount shall be supplied by 6 or 7 billion Euros in direct sales (we already register a €4 billion scope). In total, the sector will exceed a €22 billion investment”.

Moreover, Adolfo Ramirez claims the annual investment in the following years may settle down at €5 billion. “We have seen opportunistic funds flocking into the country but now also less-risky capital is eyeing our property”.

Furthermore, the chairman mentions two buildings sold in Madrid (on the Castellana and the Serrano Streets) and the State debt sales as the proof of divestment with profits.

On the market recovery, he says the sector is watching a huge polarization as the best office assets and luxury property are already increasing their prices, while many dwellings remain empty.

Ramirez admits real estate appraisers had their hands full and played an important role during the property boom. For the future, he calls for a total independence for these companies and unification of international regulations for valuation and appraisals.

 

Original article: Cinco Días (by Alberto Ortín)

Translation: AURA REE