13 January 2016 – Cinco Días
Real estate investment soared by 67% in 2015 to reach €11,700 million, a record figure that exceeds the total level of investment seen even in the years before the crisis by 25%, according to the consultancy BNP Paribas Real Estate.
After a record year, the firm considers that it is more than likely that the volume of investment will stop growing and will instead stabilise at around €8,500 million (compared with €9,000 million in 2007), due to, amongst other reasons, the scarcity of appropriate investment opportunities and a forecast rise in the cost of money.
This recovery in the real estate sector has also manifested itself in terms of the number of transactions completed, which reached figures never seen before in the historic series, with a total of 271 operations in 2015 compared with 169 in 2014.
The retail and office segments were the most popular in 2015, with investment of almost €4,000 million in each, whilst residential assets accounted for just 5% of total investment.
The consultancy explains that this increase is due to, amongst other factors, the price of properties, many of which still have upwards potential, which would generate profits, as well as the expectations of an improved performance in terms of rental income and occupancy rates.
Madrid and Cataluña continued to be the busiest areas, with investment volumes of €6,000 million and €2,000 million, respectively. By type of asset, shopping centres were the most sought-after properties during the first half of the year, whilst operations involving office buildings were in most demand during the second half of the year.
The most active players in the market were international investors, which made acquisitions both directly, as well as through their shareholdings in Socimis.
In terms of direct investment, players from France, the USA and UK were the most active, but there were also significant capital inflows from Asian countries, such as China and the Phillipines, as well as from countries in the Middle East and Latin American, although the latter was more symbolic than anything.
In September, the company revealed that the total annual investment volume may amount to almost €12,000 million, or to €10,000 million excluding merger deals.
The real estate investment data provided by BNP Paribas Real Estate is based on certain economic indicators that forecast GDP growth of 0.8% in Q3 with respect to the previous quarter, which would mean GDP growth of 3.2% for the year as a whole. In addition, GDP is expected to grow by 2.5% in 2016.
Original story: Cinco Días
Translation: Carmel Drake