The British citizen Alex Vaughan, co-owner of the real estate agency Lucas Fox, with headquarters in Barcelona, has been managing for many years the investments from foreigners in the Spanish luxury residential market. He assures that, since last October, the agency receives between 20 and 30 daily requests from people from all over the world and a high buying power interested in acquiring in Spain in exchange for a residence permit. Vaughan declares that his agency already has 200 investors with committed houses in Spain who are ready to buy when the law comes into force.
Since the Government announced last October that it would grant the Spanish residence to those investing in real estate assets, there have been thousands of millionaires from all over the world that have shown their interest in Spain. The fear of the country risk and the real estate bubble have shifted to the background, eclipsed by the promise of papers that will allow to live not only in Spain, but also to travel around the Schengen territory.
Most of the interested investors come from China, where Lucas Fox is in contact with twenty real estate investment firms (such as SQFT), which have a total of 500 Chinese citizens ready to buy. They have also received hundreds of requests from the United States, South America, Russia and India. Some of the interested investors come from more exotic countries, such as Ghana, Nigeria, Senegal, South Africa, Indonesia, Thailand, Egypt and Australia.
The draft of the Law of Entrepreneurs driven by the Government establishes that it will grant the residence permit to those buying properties for more than 500.000 Euros (with no charges) and also to those investing two million Euros in public debt, in shares of Spanish companies or in bank deposits, as well as to those assigning capital to general interest projects. The exact conditions are still unknown. “If the procedure is easy, we will see a huge number of acquisitions of properties”, Vaughan assures. The managing director of the real estate company Coldwell Banker in Spain, François Carrière, assures that some owners have rounded off upwards the properties which did not reach 500.000 Euros in order to attract these investors.
Lucas Fox has teamed up with the law firm Ecija in order to create a one–stop company window where investors will be able to manage the acquisition of a property and the obtaining of the residence permit as well. The lawyer in charge of this project, Gabriel Nadal, explains that even though the law has not been passed yet, it is planned that the buyer and its family will receive a permit for two years, renewable while they keep the property.
The foreigners that will invest in Spain in order to obtain the visa all meet the same traits: they have money, they believe that prices have reached their rock bottom level and they consider that prices are cheap, as they compare Barcelona or Madrid with cities such as London, Bombay and Shanghai. It could seem the dream of any real estate agent, but all agree that the investors have something else in common: “They are rich, but they are not stupid”.
The specialized agencies awaiting international investors assure that they know the current price level of the market and that they will not pay more than usual.
The star asset is a property in Barcelona, as most of the investors until now are Asians and have arrived attracted by the climate and the modernist architecture. The director in Shanghai of the real estate consulting company Singapur Squarefoot Global Properties (SQFT), Sylvan Ma, is specialized in the investments of Chinese families abroad. He explains that in order to buy in London, Chinese citizens do not need to visit the property: they can buy from Shanghai. But they show more reluctance when it comes to Spain. Sylvan Ma has been twice in Barcelona this year and he will travel there four more times. In each visit, he comes with ten Chinese citizens, “only those who are about to buy”, he explains. “When they land here, they see the sun, Paseo de Gracia, the architecture, the beach….. and they get crazy: think that in Shanghai they see the sun only five times per year”. Apart from Barcelona, they have visited country houses and castles at the Costa Brava and houses in Ibiza of more than six million Euros, but most of them will choose Barcelona.
The residence is also the main motive for the Egyptian Amr Shamel. He studied a master degree in Barcelona and now lives between Spain and Egypt. “I need the residence”, he says, while he visits a property at the Barceloneta beach, valued at 1,1 million Euro. “I will invest a bit more than 500.000 Euros, but I am also looking for my father, my uncles and friends”, as he works in an investment company. He thinks that prices are reasonable. “We will buy abroad because you are aware of the situation in our country”. The Indian investor Raj Airy sees a property in Barcelona as the entrance to Europe. “It is difficult for an Indian to get a visa, so we will invest here because the access is now easier”.
The investors from South America, however, have always preferred Madrid and it is foreseen that they will choose the capital.