6 April 2017 – Expansión
Investors’ appetite for real estate assets in Spain is continuing in 2017. After two record-breaking years, the pace has been maintained during the first three months of this year, with real estate purchases amounting to €3,417 million, according to the consultancy firm CBRE.
This figure represents an increase of 50% with respect to the same period last year. “The figure in 2017 reflects the fact that interest in buying in Spain has not slowed down at all and that although 2016 closed with a fast pace, there are still a lot of investors out there and a lot of liquidity in the Spanish real estate market. Moreover, the political and economic uncertainties of 2016 have now disappeared”, explained Mikel Marco-Gardoqui, Head of Investment at CBRE España.
Amongst this buyer furore, international investors are playing a leading role, accounting for 70% of the total volume disbursed during Q1, according to the consultancy firm’s report.
Of those, the most active have been the US funds, such as GreenOak, CBRE Global Investors (which acquired the Barclays offices in Plaza de Colón), Hines (the new owner of Popular’s headquarters in Barcelona) and HIG Capital, in terms of tertiary assets, and Värde (the majority shareholder of the property developers Vía Célere and Aelca) and Blackstone in the case of purchases in the residential sector. “International investors are primarily looking for opportunities in retail (both shopping centres and high street stores) and offices, although increasingly more funds are looking for opportunities in residential land and logistics”, said Marco-Gardoqui.
After the US funds, investors from the United Kingdom have been the most active in 2017, accounting for 29% of the total investment figure. Of those, Intu Properties stands out the most. The British company, which specialises in shopping centres, starred in the largest ever purchase in the Spanish retail market, by paying €530 million for the Madrid Xanadú shopping centre, in Arroyomolinos. “Core and core plus investors account for around 40% of the money invested in Spain, whilst those dedicated to adding value represent another 40%; by contrast, opportunistic funds now account for the remaining 20%.
By type of properties, retail assets (shopping centres and high street stores) have been the star products in the investment market, accounting for purchases amounting to €1,365 million in Q1. The sale and purchase of offices amounted to €646 million, according to CBRE’s figures, whilst investment in hotels stood at €564 million, followed by residential assets (€457 million) and logistics properties (€241 million) – the remaining €124 million corresponds to individual assets. “The figure in the hotel sector is noteworthy, given that during the first three months of 2017, the sector has achieved almost 30% of the record-breaking figure it registered in 2016 (€2,000 million)”, said Lola Martínez, Head of Research at CBRE.
The Socimis, the other active profile alongside the foreign funds, spent €643 million buying up assets during the first quarter of 2017. Of that figure, Merlin accounted for almost half (around €300 million), with two significant operations: the purchase of a logistics portfolio from Saba and the acquisition of Torre Agbar, after the project to convert that property into a five-star hotel failed to materialise. “The Socimis continue to be major players in the investor market, and they will continue that role, with their respective specialisation strategies”, predicts the expert from CBRE.
Whilst international funds have starred in operations amounting to more than €100 million, domestic investors (primarily family offices) have become the major competitors against the insurance companies in operations ranging between €30 million and €40 million, accounting for 11% of the total volume, according to Marco-Gardoqui.
After a record investment volume of €14,000 million in 2016, the experts believe that this year, the figure will amount to around €10,000 million, which was the volume achieved at the height of the boom (2007).
Original story: Expansión (Rocío Ruiz)
Translation: Carmel Drake