18 February 2015 – El País
The housing market is the last sector to emerge from the crisis. Nevertheless, investment returned to the residential segment last year, after seven years of sluggishness towards undertaking significant projects in the Catalan capital. In addition to the purchase of portfolios by vulture funds, nine major acquisitions were also recorded in Barcelona, corresponding to 55,095 square metres, according to the real estate consultant CB Richard Ellis. These developments, most of which are aimed at high-end clients, showed a move away from the traditional prime (residential) area – Sarria-Sant Gervasi – towards the neighbourhoods of Eixample, Ciutat Vella and Diagonal Mar.
The Vice President of CB Richard Ellis, Enrique Martínez-Laguna, described 2014 as a “historical” year because the volumes of investment amounted to €10,463 million across the whole of Spain, even higher than the levels recorded in 2007, the year in which most capital was invested. The Director of the consultancy firm in Barcelona, Anna Esteban, highlighted that property prices have fallen since then, and so more transactions were recorded in 2014 than in 2007. The consultancy firm expects investors’ appetite to continue this year, to the extent that “we will begin to see cranes (appearing on the horizon)”, says Martínez-Laguna.
The Catalan capital destroyed 90,000 square metres of office space in 2014
But the map of the city has not only changed in terms of the construction of housing. In total, 90,000 square metres of office space were destroyed in the city centre in 2014 alone. Buildings were converted or will shortly be converted into hotels and homes.
For example, the Paseo de Gracia, has now become a residential and retail area. And something similar may take place on the Diagonal following its renovation. “There are also two buildings, at number 10 Francesc Macia and number 111 Paseo de Gracia, whose premises could be converted into the entrance of what may become a new open-air shopping centre” says Martínez-Laguna. At the same time, some of the buildings in the 22@ district are generating very similar rents to those being paid for other properties in the traditional business district.
The current rental price in the best areas of Barcelona amounts to c.€17.75 per square metre, down from the peak of €28/m2 recorded in 2007. Moreover, the consultancy firm considers that these rents have now bottomed out and will grow by 30% over the next two to three years.
Original story: El País (by Lluís Pellicer)
Translation: Carmel Drake