Bumper Investment in the Commercial Real Estate

3/07/2014 – Expansion

Real estate investment in Spain clearly focuses on one asset type: shopping centers. They have been calling attention of foreign investors since last year and the buying apetitte has not ceased until now.

Thus, throghout 2013, investment in the commercial assets (malls, locals and medium-size stores) reached €1.19 billion. It is by 69% more than a year earlier. The transactions carried out in the first quarter of 2014 exceeded €1.4 billion.

Oaktree, Baupost, KKR and GreenOak are among the funds that decided to purchase the CRE in Spain this year. Some experts claim the opportunistic funds will have to soon give way to institutional investors.

In September, five more shopping malls will join the “for-sale” list which is currently composed of eight of them.

The conclusion of the first half of the year with a €1.5 billion investment (including the sales of property-backed loans) inclines one towards a prediction that at the end of the year the sector will witness a decade record of over €2.7 billion. Shopping centers will presumably represent 60% of the amount.

One of the most convincing factors for the buyers is the turnover settled above the European average, even if it is declining gradually. Last year, yields fell by 16% on average, landing at 15 Euros per square meter monthly, dipping down in case of small parks with an over 32% vacancy.

In 2014, no more new malls are expected to be built, although some of the existing ones may opt for expanding their areas.


Original article: Expansión (by Rocío Ruiz)

Translation: AURA REE