RE Inv’t Reached €1,977M In Barcelona In 2015

16 January 2016 – El País

Real estate investment reached record figures in Barcelona last year. It amounted to €1,977 million in total, up by 43% compared with 2014, and exceeding even the levels seen before the crisis. The recovery in the office market primarily drove the trend, although there was also another important factor: overseas investment. According to a report by Aguirre Newman, foreign buyers accounted for 55% of all investments, and that percentage increases to 85% if we consider the Socimis’ shareholders. The remaining capital is local.

Investors’ need to seek reasonable rates of return explains their interest in Barcelona, according to the CEO of Aguirre Newman in Barcelona, Anna Gener. In her opinion, neither the sovereign process being undertaken by the Generalitat or the hotel moratorium imposed by Barcelona’s Town Hall have scared off investors, and her views are supported by the figures. The Catalan capital has continued to attract the same rate of investment as the rest of Spain, which amounted to €10,790 million in 2015, another historic record.

“Investment has grown a lot, given that the must talked about exodus of businesses did not happen”, explained Gener yesterday, who added that real estate advisors are more concerned about finding available supply for potential institutional investors, who have traditionally ben conservative when it comes to investing. She said the same thing applied in the case of hotels, which in Barcelona accounted for investment amounting to €347.5 million, despite the decision by the Barcelona en Comú Government to block new openings. “Hotels in Barcelona are so profitable that everyone wants hotels and the moratorium removes competitors from the sector”, said Gener, who predicted that the price of hotel licences will increase as a direct result of the Government’s measure.

The office market is still the most active segment, after achieving a rental volume of 400,000 m2 and total investment of €885 million, up by 52% compared with a year earlier. Aguirre Newman thinks that the major problem is the scarcity of supply in premium areas, which is putting upwards pressure on prices. Its major client this year has been la Generalitat, with the operation to concentrate offices from different departments in the Zona Franca, in one of the large facilities measuring 46,000 m2. There is no availability in the city centre for offices measuring more than 1,500 m2.

Another sector that is rising from the ashes is residential, with growth of 43% and an average price rise of 8% last year. The consultancy firm predicts an increase in the number of projects involving renovations and changes in use to luxury residential, with international buyers dominating the segment. In these high-end cases, Aguirre Newman forecast that prices may even reach €10,000/m2.

The forecast for this year is that investment across the whole real estate sector (in Barcelona) will amount to €2,000 million once again.

Original story: El País (by Dani Cordero)

Translation: Carmel Drake

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