19 April 2017 – Eje Prime
The retail and office segments are driving investment in the real estate sector in Spain. Real estate investment amounted to €3,520 million during the first quarter of the year, in terms of non-residential real estate assets, of which more than half were located in Madrid and Barcelona, according to the real estate consultancy firm Laborde Marcet.
By sector, retail accounted for 42.5% of investments, amounting to €1,495 million, whereby recovering the starring role that it had ceded to the office segment in recent months. Offices accounted for 24.7% of total investment (€868 million). Meanwhile, the hotel sector accounted for 22.2% of the market (€783 million) and logistics the remaining 10.6% (€374 million).
“The real estate sector is reaching exorbitant levels in terms of the final prices of operations because there is a clear mismatch between the demand that exists and the available supply” – said Miquel Laborde, Managing Partner at Laborde Marcet -; “cities such as Barcelona and Madrid have very attractive real estate assets for both real estate investment purposes, as well as for commercial objectives, but there are only a handful of assets available for the large number of domestic and overseas investors interested in acquiring them, which means that rental and purchase prices are rising and asset yields are reducing”.
In this sense, domestic investors closed four out of every ten transactions completed during the first three months of the year, which represented an increase in Spain’s weight in the non-residential real estate market with respect to 2016.
By nationality, British, US, French and German investors were the main representatives from overseas, and they were particularly active in large operations in the offices and shopping centre segments.
If investment continues in this vein for the rest of the year, the tertiary real estate sector will register a record real estate investment figure of €14,000 million, which would represent an increase of 21.7% with respect to the data obtained in 2015 and of 25.8% with respect to 2016.
Original story: Eje Prime
Translation: Carmel Drake