Deutsche Bank Advises Investors To Buy Spanish RE
17 September 2015 – Cinco Días
Foreign capital is no longer frightened of Spanish real estate. In a report published yesterday by Deutsche Bank, the German financial institution recommends investors to take positions in real estate assets in our country.
“Over the next five years, we expect Spain to be one of the best performing markets in Europe”, says the report.
In fact, the Deutsche Asset & Wealth Management division – which has prepared the document – advises investors to take positions in Southern Europe in general, lead by the growth in Spain. It calls on investors to acquire more weight in investments in offices, commercial premises in prime areas and in logistics assets in our country. By contrast, it recommends an exit from London.
Amongst its reasons, the entity explains that following the reductions in returns in recent years, a sustained recovery in terms of rental income has started to materialise in cities such as Madrid and Barcelona.
The bank says that taking positions by acquiring assets, renting them out and promoting them in the heart of both cities will create value, above all, taking into account the fact that high quality assets in the centres of Madrid and Barcelona are in short supply. In fact, it highlights that these two cities offer the highest returns, ahead of Frankfurt, Munich, Milan and the La Défense district in Paris. The entity also points to opportunities in the central locations of smaller Spanish cities such as Valencia and Bilbao.
The economy as the driving force
Amongst the various factors at work in the Spanish market, the firm highlights the strong growth of the economy and the creation of jobs, which are both driving demand.
It also highlights the increase in the occupancy rates of offices in Madrid and Barcelona; available space is becoming increasingly scarce. Furthermore, rental prices are increasing in the most prime locations and it expects this trend to last for the next five years. Similarly, it states that investment volumes are returning to pre-crisis levels.
Original story: Cinco Días (by A. Simón)
Translation: Carmel Drake