STR & Magma HC: Hotel Investment Continues to Rise in Spain

2 August 2018 – Hosteltur

The Spanish hotel industry has increased its interest in investment due to the strong growth in yields in several markets, and despite the fact that the political scenario in Cataluña has slowed down the performance of the country as a whole. That is according to analysts from STR and Magma HC, who explain that the investment boost has been largely driven by the strength of international demand, even during the financial crisis.

“The increase in holiday tourism, as well as in ‘bleisure’ (business with leisure tourism) has opened the market to numerous development opportunities, with several operators currently working on improving their products and services to satisfy the growing demand”, says Albert Grau, founding partner at Magma HC. Thus, in his words, the Spanish hotel sector “is continuing to boom, despite the challenges ahead”.

In this sense, it is worth remembering that, between March 2015 and March 2018, Spain registered 37 consecutive months of RevPAR (revenue per available room) growth. In recent months, by contrast, there have been marginal decreases, above all due to the slow down in Barcelona, which is home to the largest number of rooms in the country. Even so, according to data from STR, in most of the key domestic markets, including in Madrid, hotel yields are continuing their strong upwards trend.

“Vacation markets, primarily Gran Canaria, have experienced YoY decreases because tourist demand has returned to rival destinations such as Turkey and Egypt”, says Javier Serrano, manager at STR for Spain.


STR’s study shows that, in general, hotels in the Catalan capital have managed to keep their tariffs more or less stable, although there have been more notable decreases in recent times. Following the independence referendum last October, the occupancy rate of establishments in Barcelona fell considerably. During the first half of 2018, they fell by 5.2% with respect to the same period a year earlier, whilst the ADR (average daily rate) fell by 1.4% compared to 2017.

“Although it is still too early to make any kind of prediction about what will happen in the market in the end, it is likely that Barcelona will recover quickly once the situation stabilises”, says Serrano. “Hotels in Barcelona”, he adds “saw constant monthly RevPAR growth rates in the double digits in 2016 and 2017, when the market was still benefitting from strong international demand and demand diverted from destinations such as Turkey and the north of Africa. The recent instability in Barcelona slowed down those previous growth rates, with decreases in occupancy rates driven by the decrease in domestic and international demand, mainly from the USA. Nevertheless, if the market manages to keep tariffs stable, we should see growth to the extent that consumer confidence returns to Barcelona”.


Madrid, with the highest RevPAR growth rate in all of Spain in 2017, has benefitted over the last three years from demand due to leisure and corporate business. As well as being one of the main weekend destinations for Europeans, it has also seen an increase in interest from several Asian countries and the USA, especially when it comes to group reservations (…).

The Director-General of STR, Robin Rossman, believes that “there is enormous potential for Madrid’s hotels to continue pushing up rates”. In his opinion, “to the extent that demand continues to grow and the hotel supply market continues to evolve with the arrival of more high-end properties, we can expect to see increases in the ADR”.

Overall, the analysts at STR expect that corporate demand in Madrid will continue to increase thanks to the celebration of international events and the relocation of the headquarters of several companies from Barcelona to the Spanish capital. As such, they forecast ADR growth of close to 3% in Madrid by the end of 2018.

Original story: Hosteltur

Translation: Carmel Drake

Servihabitat: Spain’s Housing Market Continues on its Positive Trajectory

24 July 2018 – Eje Prime

The housing market in Spain is going to continue with positive figures across all areas in 2018. That is according to a report from Servihabitat, which indicates that prices are going to continue to rise this year, up by 5.4%; operations are going to soar, with a leap of 24%; and new build starts are going to rise by 16.6% (all figures compared to last year).

According to the report, these increases respond to a residential market that “is progressing with clear signs of consolidation”, which is explained by factors such as an improvement in consumer confidence, the containment of unemployment and the positive evolution of companies’ turnover.

These elements “are encouraging the start of housing projects and configuring an expansive cycle”. With a special focus on the largest populations in Spain, such as Madrid, Barcelona, Málaga, Valencia and Sevilla, in the case of homes for regular use, and on regions such as Galicia, La Rioja, the Community of Valencia and the Canary Islands, the number of new home starts will rise by 16.6% this year to 93,895 units.

Meanwhile, the number of finished homes will rise by 15.5% during the course of this year, according to Servihabitat’s forecasts, with a total of 63,744 homes delivered. Despite that, the pull of demand will reduce the new build stock by 4% to 454,939 homes, with a greater reserve in the communities of Cataluña, the Community of Valencia and Andalucía (the three account for 49% of the total stock).

The second major increase will be seen in the number of transactions, in other words, the sale of homes signed at the notaries’ offices. According to the report, the year will close with a total of 669,739 transactions subscribed, up by 24.3% compared to 2017.

Macroeconomic conditions, together with opening up of the financial sector to the granting of mortgages and demand for property investment (thanks to the returns that the rental market is offering) are the three main drivers of demand, which have reduced the average sales period for a normal home to 6.6 months.

Finally, the evolution of supply and demand will lead to a rise in house prices once again this year, up by 5.4%, compared with an increase of 6.2% with respect to the previous year.

Prices are expected to grow by the most in the Community of Madrid, with a forecast increase of 11.5%; followed by Cataluña, 9.6%; the Balearic Islands, 8%; and País Vasco, with an expected increase of 5.2%. By contrast, prices are forecast to rise by less than 1% in the autonomous regions of Extremadura and Castilla-La Mancha in 2018.

The report also reflects the opinions of the real estate agents who form part of Servihabitat’s own network of branches and its collaborating agents. In particular, 64.2% of that sample believes that the price of regular homes (primary residences) will remain stable in 2018, compared with 33.2% who think that they will rise and just 2.6% who consider that prices will fall. In the case of holiday homes, the dispersion is somewhat greater: 34% forecast that prices will rise this year; 62.6% think they will remain stable and 3.4% believe that they will fall.

Original story: Eje Prime (by C. de Angelis)

Translation: Carmel Drake

Via Célere Expands in Portugal Building 60 Homes in Porto

27 February 2018 – Eje Prime

The developer began operations Portugal last September with the launch of its first venture in Lisbon, where it is building a development of 276 homes.

Vía Célere now intends to expand its footprint in the Portuguese real estate market. This time the developer headed to the north of mainland Portugal, setting its sights on the city of Porto. The Spanish real estate company will build 60 homes on land that it had previously acquired through a merger.

The company, chaired by Juan Antonio Gómez-Pintado (pictured above), will launch the development on a 6,144-square-meter site that was incorporated into Vía Célere after its merger with Dospuntos. The project will be implemented in Lordelo do Ouro, a neighbourhood that is four kilometres from the city centre, according to El Economista.

The Vía Célere development in Porto reinforces the commitment, not only of Gómez-Pintado’s real estate firm but also of Spanish real estate developers in Portugal. “It is the right time to move forward with the development of new projects in Portugal. Because of its sustained economic growth and the growing confidence and purchasing power of its consumers, in an environment of greater access to finance and low-interest rates, the Portuguese market is an excellent opportunity for real estate investment,” via Célere’s chief executive stated during a presentation of the project in Lisbon.

The Lisbon development will begin construction during the second semester of this year and will be divided into four phases. In the first phase, a residential area encompassing 15,800 buildable square meters will be built, together with up to 120 multi-family homes. The land for this project also originated with Via Célere’s merger with Dospuntos.

Original story: Eje Prime

Translation: Richard Turner

Savills: Spain Leads RE Inv’t in Southern Europe

12 December 2017 – Expansión

Real estate investment in Spain is on the verge of setting a new record and positioning the country as the leader of the sector’s boom amongst its counterparts in Southern Europe. Specifically, investment in the tertiary market (offices, retail, hotels and logistics assets) in Spain looks set to amount to €8.9 billion in 2017, which represents an increase of 5% compared to the previous year and the highest figure in a decade, according to a report from the consultancy firm Savills.

The report reveals the strong performance detected in the retail and hotel sectors and also highlights that the growth in e-commerce in Spain is expected to result in greater demand for logistics and storage space, a segment that has lagged behind the main markets in Europe until now.

Luis Espadas, Director of Capital Markets at Savills España, also points out that, to the extent that demand in the more traditional sectors grows, so investors are starting to focus on alternative products, such as student halls and nursing homes. “That market may be small still but it has the potential to develop more attractive returns and price differentials”.

Other countries

The recovery of the sector in Spain has been followed by an upturn in other countries such as Italy, Portugal and, more recently, Greece and Cyprus. In this way, after a few years of weak investor activity, the volume of investment in Southern Europe increased by 277% in 2017, compared to the minimum of €5.2 billion recorded in 2012.

Overall, total investment volumes increased by 8% YoY. The markets in Southern Europe now account for 10% of the total investment in the European Union, compared to the 5% that they represented in 2012. “Economic growth, the decrease in unemployment rates and renewed consumer confidence are attracting investors back to Southern Europe”, says Alice Marwick from the Europe Research department at Savills.

Original story: Expansión (by R. Arroyo)

Translation: Carmel Drake

Thor Equities Buys Store In Puerta del Sol For €43M

13 March 2017 – Expansión

Madrid’s high streets and specifically, those with the greatest numbers of tourist visitors, are starring in some of the largest investment operations in the retail sector.

The latest example is the purchase completed by the US fund Thor Equities. The firm, which specialises in the management and development of all kinds of real estate assets, has completed the purchase of a 520m2 store at number 5, Puerta del Sol, in Madrid. It has paid €43 million for the property, which is leased to the tenant Futbolmanía.

The fund Thor arrived in Spain in September 2015, when it acquired another store in La Puerta del Sol, worth €9.5 million, which used to be owned by Kutxabank.

Several months later, it spent around €65 million on a building owned by El Corte Inglés. The property, which used to house a bookstore, has a surface area of 1,344 m2 spread over three floors. A search is currently underway for a tenant for that property, following the departure of El Corte Inglés, which remained as a tenant for a year following the sale.

The US fund has also acquired the building at number 16 on Calle Fuencarral. In these operations, Thor has been advised by the real estate consultancy Knight Frank.

“We still firmly believe in the Madrilenian market – and in particular, in the area of high footfall around La Puerta del Sol – due to the continuous growth of the Spanish economy and the increase in consumer confidence, as well as the persistent increase in the number of overseas visitors to the city, all of which are leading to increases in retail sales”, said Jared Hart, CEO at Thor Equities.

Internationally, Thor Equities owns high-profile properties in London, including 1 Dover Street, 145 Oxford Street, 105-109 Oxford Street and Bond Street House on 14 Clifford Street, as well as the Burlington Arcade, as well as buildings on the Champs Elysees in Paris.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Fitch Confirms The Credit Recovery In Spain

23 April 2015 – Expansión

Over the last month, Fitch Ratings has revised upwards its growth prospects for Spain in 2015 and 2016, to 2% and 2.3%, respectively. In this context of recovery, the agency notes that “new credit growth has been more robust during the first quarter of 2015” and it expects this trend to continue for the rest of the year. Although, the pace will depend on “the strength of the economic recovery and consumer confidence”. “The banks’ healthier balance sheets and initiatives being taken by the ECB to improve liquidity, including the TLTRO (long-term auctions) should support this increased lending”.

Fitch makes these reflections upon publication of its Fitch Spanish Fundamentals index, which analyses changes in the fundamentals of credit, taking into account the key indicators of the Spanish economy: the evolution of mortgages, SMEs and securitisations, the expected EBITDA (gross operating profit) and capital expenditure (capex) of companies, ratings outlook, CDS forecasts, new credit, unemployment prospects and trends in transport. The index ranges from 1 to 10 and Spain is awarded a six, which shows that “its recovery is holding up”.


In terms of unemployment, another one of the key variables that Fitch uses in its new index, the agency forecasts that the rate will amount to 22.5% and 21% in 2015 and 2016, respectively. “This positive trend in employment will support domestic demand. The increase in real disposable income, together with the fall in oil prices, should also drive economic growth”. Nevertheless, in the agency’s opinion, unemployment continues to be too high and, as a counterpoint, it warns that the non-financial corporate sector is continuing to deleverage.

The agency confirmed Spain’s BBB+ rating in October last year with a stable outlook.

Original story: Expansión (by D. Badía)

Translation: Carmel Drake

Bank Of Spain: Demand For Home Loans Increases Again

28 January 2015 – Expansión

The bank loan survey carried out by the Bank of Spain and the main Spanish financial institutions shows that “requests from families for home loans increased in January, after remaining stable during the previous three months in Spain and continued their progress in the Eurozone”. The report explains that “the main drivers of this development was an improvement in the prospects of the housing marketing and an increase in consumer confidence”.

Just yesterday, INE reported that the mortgage market grew in November for the sixth consecutive month, this time by 14.2% with respect to November 2013. Specifically, 15,900 new home loans were signed in November, 10.1% fewer than the 17,687 taken out in October. The average mortgage amounted to €104,817 in November, compared with €99,866 in the previous month, representing an increase of 5%.

Management of, the real estate portal, interviewed by Efe, considers that these data confirm that “the desired reactivation of mortgage financing” was achieved in 2014, as a result of “increased activity in the economy, better prospects for the real estate market and the need for banks to do business following the liquidity crisis”.

In this sense, the Bank of Spain’s survey explains that the criteria for approving new loans were “somewhat less restrictive” for home loans than for unsecured loans.

In terms of corporate loans “the growth in requests for loans by SMEs was higher than those for large companies in Spain”.

Original story: Expansión (by Y. González)

Translation: Carmel Drake

Bank of Spain: Positive Outlook For 2015

28 January 2015 – Expansión

The Bank of Spain emphasises the “stimulation” of private consumption / It also highlights a “slight improvement” in the production of goods, car registrations and consumer confidence and acknowledges the positive trend in employment.

Although the spending power of Spanish citizens has not yet returned to its pre-crisis levels, it did improve during the last quarter of 2014. The construction sector, one of the areas hardest hit by the crisis, also experienced a revival. These are two of the conclusions of the January Bulletin issued by the Bank of Spain yesterday. One of the factors that has contributed to this progress is “an improvement in financing conditions”. That is, the depreciation of the euro, the decrease in interest rates and the collapse of oil prices. Another positive development is the “very favourable performance of the labour market”.

The supervisory body says that the construction sector experienced an “upturn” in the latter part of last year, evidenced by an increase in the number of Social Security enrolments and a rise in cement consumption. “The information indicates that the recovery in the construction sector will continue, a trend that, from the point of view of the type of work, will affect both the residential and non-residential segments”, says the report.

Furthermore, the Bank of Spain insist that “private consumption indices suggest that this component of demand experienced more dynamic behaviour during the final part of 2014”. According to the Bulletin, a “slight improvement” was observed in retail sales, car registrations (which recorded an increase of 0.2% in December following a decrease in November), the production of consumer goods and consumer confidence. The day before yesterday, the main association of car manufacturers, Anfac, reported that 2.4 million vehicles were manufactured last year, 11% more than in 2013.


According to the regulator, the improvement in the labour market also gives cause for optimism. The Bulletin states that the Labour Force Survey (LFS) for the fourth quarter of 2014 showed a quarter-on-quarter increase in employment of 0.9% in seasonally adjusted terms, with the creation of 434,000 jobs, which will benefit almost every sector (especially construction), with the exception of agriculture. In addition, the number of full-time employees grew at a similar rate to those hired on part-time contracts.

In terms of the performance of the industrial sector, the Bank of Spain said that the month-on-month decline in the industrial production index moderated in November by 0.4%, whilst the two most important indicators of progress in the sector (the European Commission’s industrial confidence index and the manufacturing PMI) remained at “levels that are consistent” with continued expansion in this area.

The report also celebrated the “dynamism” of foreign tourism. Nevertheless, it highlighted that both the export and import of goods grew at more moderate rates in November. The latter grew by 4.3% in November, compared with 9.9% in October.

Similarly, the Bulletin indicated that the evolution of prices during the last part of 2014 was greatly affected by the unstoppable decline in oil prices on international markets, which caused CPI to decrease by 1% in December, year-on-year.

Economy-wide growth

Meanwhile, the Secretary of State for the Economy, Íñigo Fernández de Mesa, also said yesterday that growth in Spain will be “much more intensive in terms of labour, because more jobs will be created with less growth, and less intensive in terms of credit” and (growth) “will be based on all of the engines that drive the economy”, both the export sector and internal demand. “We are confident that 2015 is going to be a year of consolidation”, since “for the first time in a long time, Spain is not only growing, but all of the imbalances are also being corrected”, he said.

“Spain has gone from being the problem-child of the euro zone to being the country that is generating the highest growth and helping to drive the eurozone economy in a more intense way”, he said. He also pointed out that “growth is now greater” in those countries in which “the most significant reforms have been carried out”.

Original story: Expansión (by Yago González)

Translation: Carmel Drake