Overview – january
2018 began with the publication of another round of record-breaking figures for the previous year. All of the indicators show that the real estate sector is booming, and that activity is increasingly spreading out beyond the traditional focus on Madrid and Barcelona. Indeed, in January, deals were signed Sevilla, Tenerife, Santander, Logroño, Oviedo and Cádiz, amongst others.
2017 – the final verdict
According to JLL, real estate investment rose by 45% in 2017 to €14 billion, driven by the retail and hotel sectors in particular, which recorded investment figures of €3.9 billion apiece, up by 31% and 79% YoY, respectively, despite the fallout from the Catalan secessionist bid.
In the residential sector, Fotocasa reports that rental prices rose by 8.9% on average in 2017, the highest increase ever recorded in the historical series (compiled since 2007) and according to the Ministry of Development, new home permits soared by 27% last year to around 81,500.
In the retail sector, Inditex sold 16 high street stores in Spain and Portugal to the German fund Deka for €400 million in a sale and leaseback deal; Thor Equities sold a store on Calle Fuencarral, 16 to Union Investment; and Mango’s owner sold an H&M store in Burgos to Mutualidad General de Abogacía for €12.6 million. Meanwhile, beyond the city centres, CBRE GI sold the Berceo shopping centre in Logroño to one of the Barings funds for €105 million; an unnamed British fund purchased the Modoo shopping centre in Oviedo from Alpha Real Capital; and Sareb sold Parque Corredor shopping centre in Madrid to Redevco and Ares.
Land continued to be the most sought-after and scarce asset in the country: in Madrid, Colonial purchased two plots spanning 110,000 m2 in the Méndez Álvaro area for €185 million on which it plans to build two office complexes; in Tenerife, Spring Hotels acquired 62,000 m2 of land for €85 million, on which it is going to construct a 525-room hotel; and in Sevilla, Activum bought 19 plots of land from CaixaBank on which it intends to build 1,000 homes. Finally, also in Madrid, the residential property developer Pryconsa was awarded the bus depot plot in Carabanchel by the Town Hall for €19.1 million, which has capacity for 268 homes.
The major deal of the month in the office segment saw the Socimi Colonial purchase the Egeo building in Madrid from Lar España for €79.3 million. In other operations, New Winds Group bought Hearst’s HQ in Madrid from Patron Capital; the family office Mazabi acquired the Dávila office building in Santander; and the insurance company Generali sold a 3,400 m2 office building in Girona to a private investor, all for undisclosed sums.
Finally, in the hotel sector, Banco Sabadell continued its divestment strategy with the sale of 5 more hotels, located all over Spain, to several buyers, including Barceló, Hotusa and Artiem for €20 million in total.
In the residential sector, the US fund Lone Star sold its remaining 12.5% stake in the property developer Neinor Homes for €174 million; with the Norwegian Pension Fund purchasing a 4.8% stake for €70 million. Meanwhile, HSBC acquired 6.9% of the Axiare for €100 million in the midst of that Socimi’s takeover by Colonial.
The year ahead
Multiple firms started the new year by announcing major spending plans for 2018 and beyond. The Mallorcan hotel chain Riu reported that it plans to invest €2.5 billion in new hotels and refurbishments, including its Edificio España project, between now and 2022; the largest real estate group in Europe, Unibail-Rodamco has committed to spend at least €800 million in Spain over 6 years on the construction and renovation of shopping centres; a newly launched fund, Stoneshield Capital, led by Juan Pepa and Felipe Morenés, and backed by Warren Buffet, amongst others, is set to invest €300 million in the Spanish real estate sector; and Lidl, P3 Spain Logistics Parks and Insur are planning to invest €300 million, €200 million and €70 million, respectively, in the retail, logistics and office segments, this year alone.
Stock market debuts
Moreover, several companies are preparing to make their stock market debuts in 2018. The most high profile firms include the property developer backed by Santander and BBVA, Metrovacesa, which is scheduled to debut on 5 February; the residential property developer Vía Célere, which is set to follow in the footsteps of its rivals Neinor and Aedas; and Cerberus’ servicer Haya Real Estate, which manages property developer loans and foreclosed real estate assets on behalf of Bankia, Sareb and BBVA, amongst others. The scene is set for an active year ahead.