C&W: Overseas Investors Will Spend $5,000M On Spanish Retail Sector In 2017

27 March 2017 – Observatorio Inmobiliario

The Spanish real estate sector will receive around $5,000 million of new foreign capital in its commercial spaces, according to the international Great Wall of Money report published by Cushman & Wakefield.

The study reveals that these figures remain at a similar level to those seen last year and place Spain in 13th position in the ranking of the leading destinations for real estate capital, ahead of countries such as Brazil and Italy.

At the global level, the real estate services company calculates that the volume of added capital for real estate investment in 2017 will amount to $435,000 million, a slight decrease compared to the peak of last year, but still the second highest figure since 2009. (…).

The amount of capital invested in the EMEA region will decrease by 9%, to $130,000 million, whilst the amount invested in the Americas region will rise by 2%, to $173,000 million. Meanwhile, the continent of Asia will also experience a slight increase in its level of investment, to $132,000 million, whereby exceeding that seen in the EMEA region. (…).

In addition to the new investment strategies, new sources of capital are expected to open up in several different parts of the world, with countries such as China, Malaysia, Taiwan and South Africa leading the way.

More concentrated investment strategies

Investors are increasingly focusing on single countries rather than deploying capital across multiple borders. Investment in single states now accounts for 61% of available capital, up by 55% over the last three years. According to Cushman & Wakefield’s estimates, the United States will likely remain the largest target investment market in 2017. Although activity there slowed during 2016, the volume of money is still high and many investors continue to have a low allocation of resources in the sector.

China is expected to continue as the second-ranked destination country, with the majority of capital invested there coming from domestic funds. (…). The third most attractive market is the United Kingdom, although Cushman & Wakefield expect the volume of capital being directed there to decrease somewhat, due to the prudence of some investors in light of the Brexit negotiations (…).

The USA exceeds the EMEA region

For the first time, the Americas ($79,000 million) have more equity available for investment than the EMEA region ($72,000 million). (…). The decrease in the volume of equity available in EMEA is to a large extent, the result of the high dollar. Almost 80% of the funds focusing on Europe present their results in Euros or Pounds Sterling, and so the currency effect represents a key component. (…).

Original story: Observatorio Inmobiliario

Translation: Carmel Drake