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Investment In Tertiary Real Estate Tripled In 2014 To €7,000m

21 January 2015 – La Vanguardia

Investment in non-residential real estate in Spain amounted to more than €7,000 million in 2014, almost triple the €2,500 million recorded in 2013, according to the consultancy Savills, which expects investors’ interest in Spain to continue in 2015, at the expense of other European markets.

Nevertheless, the possible political instability following the country’s general elections in 2015 may overshadow the optimistic scenario being painted in Spain at the moment, which is being driven by: better economic forecasts than for the other members of the Eurozone; the relaxation of credit constraints; and growth in yields on the best prime real estate assets.

The segments that played the most important role in the investment market in 2014 were offices, which accounted for 39%, and commerce and retail, with 33%.

The limited supply of “prime” products in these segments has spurred greater interest in secondary areas and other properties, as well as in other segments, such as logistics and hotels, which closed the year with the most notable increases.

Transactions involving portfolios of assets quadrupled their presence in the market, resulting in the geographic dispersion of investment.

Thanks to these types of transactions, which are expected to continue in 2015, 45% of the assets targeted for investment in 2014 were located outside of Madrid and Barcelona.

Socimis accounted for one third of total investments in tertiary assets, whereby becoming the main driving force in the market, a role that is forecast to continue in 2015.

As for the origin of investors, local players recovered market share, accounting for 44% of the total, although 72% of the volume invested by Spain was channelled through Socimis, whose shareholders are essentially international players.

The most active international players were the North American funds, with 40.2% of the market, followed by the Europeans with 37.3%. Investors from Latin America were also present; they focused on the office segment in particular, whilst investors from the Asia/Pacific region accounted for 10.6%.

Although most transactions continue to be financed using own funds, the credit market is showing signs of recovery.

Original story: La Vanguardia

Translation: Carmel Drake