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JLL: RE Inv’t Amounts To €8,697M In 9 Months To Sept 17

2 October 2017 – El Mundo

The Spanish real estate sector is recovering in leaps and bounds to the position it was relegated from during the years of the financial crisis and is becoming an object of desire once more for domestic and overseas savers alike. Proof of this is the fact that investment in the sector to date this year amounts to €8,697 million. As such, it is already approaching the total volume of investment recorded in the whole of 2016 (€9,508 million). In other words, with three months to go until year end, the cumulative annual investment figure already represents 91.46% of the prior year figure (…), according to data compiled by the consultancy firm JLL about direct investment in the tertiary sector – hotels, logistics, retail and offices – and the residential segment.

The data does not include indirect investment or corporate operations, however, it does reflect two of the trends that are marking the recovery of the real estate market in Spain: the boom in retail and the renewed interest in residential. Not in vain, investment in both sectors during the nine months to September has already exceeded the total for last year.

In terms of retail, major operations, such as the sale of the Mercado de San Miguel and the Mercado de Fuencarral in Madrid for €70 million and €50 million, respectively, contributed to boosting the investment volume to €3,267 million by the end of Q3, compared with €2,977 million for 2016 as a whole. Sources at the consultancy firm estimate that the total investment figure for the year may exceed €4,000 million and they forecast that it will be “a record year in the segment due to the number and volume of operations closed or in progress”.

Meanwhile, investment in the residential segment during the first 9 months of the year amounted to €1,188 million, compared to €802 million for the whole of last year. The data follows the positive trend of other indicators such as house prices – which rose by 5.6% in the second quarter of the year compared to the same quarter in 2016, according to the National Institute of Statistics (INE); sale and purchase operations, which grew by 14.7% during the same period; and the number of mortgages constituted, which rose by 32.9% in July in YoY terms (…).

It is not the only segment of the market to see such dynamism, given that the fever has also reached the office market. At the end of the third quarter, the sector had recorded investment of €1,759 million compared with €1,541 million during the same period last year. Sources at JLL highlight that the market in Barcelona, where the volume during YTD September (€714 million) is already 37% higher than 2016 as a whole, may end this year with double the investment figure recorded last year (…).

It may also be a record year for the logistics segment, where cumulative investment to date amounts to €578 million, around €100 million higher than during the first three-quarters of 2016 (…). The increase in consumption and the arrival of Amazon are marking the reconfiguration of that sector, especially in large urban areas (…).

Meanwhile, in the hotel sector, investment to September exceeded €1,900 million, which represents 85% of the figure recorded for last year as a whole. Changes in portfolios have been the stars in recent months, including transactions such as the purchase by Portobello Capital of a portfolio of resort hotels for €40 million.

Original story: El Mundo (by María Hernández)

Translation: Carmel Drake