Real Estate Investment in Spain Multiplies by 12 During Only One Year

19/02/2014 – El Mundo

 Foreign investors´interest in the Spanish property has grown exponencially during last year. According to Informe de inversión en el mercado inmobiliario en España 2013 report on the topic by Irea, the overall investment from the part of funds, private equity firms and financial entities rose by 118% to €13.935 million. When it comes to the real estate sector, it increased by 37% up to €5.211 million. (…) In fact, this specific kind of investment multiplied by 12, counting from the €433 million registered in 2012.

Talking about the number of transacions, the report shows that from 9 in 2012 their number advanced to 46 at the end of 2013. As CEO of Irea, Mikel Echavarren claims, “from non-existence we entered into vitality”.

Investor´s Profile

By the buyer´s classification, Sareb´s and other public administrations (AAPP)´irruption has modified the investor´s profile. In 2012, the AAPPs represented 3% of the business volume and in 2013 they appreciated by 33% to €1.737 million.

In turn, financial entities conducted transactions for €1.919 million, 70% of the total volume.

Considering asset types, the investment focused mostly on offices (36% of all) and companies (25%), basically servicing platforms. The score is similar to the one from 2012.

In case of the offices, the amount invested in them multiplied by 15 (to €1.872 million), whereas the corporate investment multiplied by 13 (to €1.309 million) in 2013.

Forecast

The growth observed since the second quarter of 2013 pushed the national economic indicators up (risk premium, GDP, etc.). (…). It is particularly visible in the real estate sector. According to Echavarren, “some opportunistic funds are already placing local teams Spain wide  and the chances are high that this will contribute to enhanced dynamics in the forthcoming months (…)”.

What is more, the CEO claims that “in 2014, the real estate debt sales will go up, fundamentally due to Sareb´s and banks´ activity and the deleveraging of other financial entities (consumer debt)”.

During this year, Madrid and Barcelona will focus investors´attention, mainly on offices, hotels and retail. At the end of the year, new products will appear in the investment list, like residential property on the coastline, students´accomodation or homes for the elderly. However, Irea predicts persistance in the internal consume weakness. (…).

Original article: El Mundo

Translation: AURA REE

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