RE Investors Defy The Secessionist Threat & Back Barcelona

13 June 2017 – Expansión

There is no evidence that any real estate investors have revoked their plans to buy in Cataluña because of the sovereignty process. What’s more, in parallel to the secessionist threat, which was launched five years ago, the volume of investment has actually risen, from €450 million (in 2012) to €1,900 million (in 2016).

At the beginning, the funds expressed their concern and warned that their own bylaws prohibited them from investing outside of the Eurozone, and so if Cataluña became independent, they would be forced to withdraw. But their fear of a possible secession has gradually dissipated and the real estate consultants that advise them in their search for assets in Cataluña state that no one has asked about the issue for months (…).

The CEO of Cushman & Wakefield in Spain, Oriol Barrachina, corroborates that in all these years, “not a single operation (…) has failed due to the sovereignty process”. He states that “the economy throws aside all political problems” and Barcelona is growing at the same rate as Madrid, and at an even faster rate in certain segments (…).

The Director of Aguirre Newman in Cataluña, Anna Gener, said that, far from finding investors who are avoiding buying in Barcelona because of the process, she has seen “precisely the opposite trend: real estate operations have been increasingly carried out by international groups”. She explains that “the appetite from foreign funds to invest in Barcelona is increasingly greater and, in fact, the volume of operations is being limited by the shortage of real estate products up for sale: if more assets were to come onto the market, the investment volume would be greater”.

Furthermore, Gener hasn’t detected any impact in terms of the yields demanded either. “The yields at which investment operations are being closed in Barcelona are very similar to those recorded in Madrid”, she said.

In terms of the market of users, at Aguirre Newman, Gener said that “over the last few years, we have not worked with any multi-national company that has wanted to avoid establishing its headquarters in Barcelona for fear of an eventual secession”. The effect has been the opposite: “we have seen a rebound in the number of multi-nationals deciding to establish their headquarters in Barcelona, such as Tesla and Amazon” (…).

Meanwhile, the CEO of JLL in Cataluña, Jordi Guardia, added that the multi-nationals that are establishing their offices in Barcelona and its surrounding areas “are signing contracts with very long timeframes, which undoubtedly indicates a sign of confidence”.

According to Guardia, just like in the investment segment, more operations are not being closed due to the shortage of supply. “No new office buildings have been built for many years and so we now face a significant shortage in terms of availability”, he said. Despite that, very good volumes of office and logistics space are now being leased”.

The warnings from the large international investors regarding their reluctance to invest in a possible independent Cataluña have not only disappeared, they have been turned on their heads. Some of those who warned about the consequences of the secessionist threat a few years ago are now starring in some of the largest investments in Cataluña. Such is the case of the President of Merlin Properties, Ismael Clemente, who warned in 2014 that “the problem with Cataluña was harming the real estate market a lot” –  earlier this year, Merlin acquired Torre Agbar in Barcelona for €142 million.

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

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