Tag: destination

Savills & HomeAway: Spain is the Most Attractive Market for Buying a Second Home

29 September 2018 – Finanzas.com

According to an international study compiled by the real estate consultancy Savills and HomeAwayTM, a global expert platform for holiday rentals, Spain is the most attractive destination for investing in a second home, according to 19.3% of those surveyed, followed by Portugal (13.2%) and France (13.1) in third place.

Spain is attractive for overseas investors

According to the survey, 44% of owners of second residences in Spain are foreigners. The main countries of origin of those owners are the United Kingdom (19%), Germany (12%), The Netherlands (4%), France (3%) and Belgium (2%). The remaining 56% of owners are Spanish.

The main areas where second homes are located in Spain include the Canary Islands (12%), the Costa del Sol (9%) and the Balearic Islands (9%).

Where are they buying homes?

People’s behaviour when it comes to acquiring a second home is different depending on where the buyers come from. The study reveals that British and Dutch owners are those who buy the most second homes outside of their own countries, nevertheless, Spaniards, Italians and Portuguese citizens tend to choose their own countries as the destination for acquiring second homes (around 95%).

Second homes: for personal use and to rent

According to the study, 28% of Spanish owners cover some of their expenses with revenues generated from the rental of their properties and 38% obtain a profit.

Summary of second homes in Spain

The average price of the second homes acquired last year by the Spanish owners surveyed amounted to €245,000, 22% lower than the average acquisition price ten years ago. Moreover, 28% of those surveyed confirmed that they personally financed the acquisition of their second home, 52% acquired it using a mortgage and 8% inherited or were gifted the property.

In the same vein, Spanish owners of second homes obtain an annual income of €12,000 (from their properties) and they rent them out for 19 weeks a year, on average. 43% of owners had the same number of reservations in recent months as they did during the same period a year ago, 41% had more reservations and 16% had fewer.

Second homes, with some specific characteristics

Two-bedroom apartments are the most popular types of second home for the Spanish owners surveyed.

Features that owners are looking for when it comes to buying a second home include: proximity to restaurants and bars (88%), a balcony or terrace (88%) and proximity to the supermarket and shops.

According to Juan Carlos Fernández, Director General for Southern Europe at HomeAway: “The fact that Spain is the most attractive destination for foreigners looking to buy a second home indicates that Spain is a robust market that is very attractive to investors and that is something that we must take care of and promote”.

Owner profile

  • Average age when they acquired the property, in 2017: 51 years old
  • Average number of weeks leased during the year: 19 weeks
  • Typical property type: 2-bedroom apartment
  • Average acquisition price in 2017: €245,000.

Original story: Finanzas.com

Translation: Carmel Drake

JLL: Real Estate Investment Rose by 45% in 2017 to €14bn

11 January 2018 – El País

The volume of real estate investment in Spain broke records once again in 2017, closing the year at €13.989 billion, up by 45% compared to 2016, according to data from the international real estate consultancy JLL. And investors were not averse to any of the market segments, although two really stood out in 2017. On the one hand, the retail sector (stores and shopping centres), which saw investment of €3.909 billion, up by 31% compared to 2016 – that represents a historical figure thanks to the 35 operations that were closed during the year. And on the other hand, investment in hotels, which increased by 75% with respect to 2016.

Not even the political crisis in Cataluña deterred hotel investment from beating its own record by the end of 2017, with investment of €3.907 billion, representing an increase of 79% with respect to 2016 and comfortably exceeding the historical record set in 2015, when investment amounted to €2.614 billion, according to the study of this market conducted by the consultancy firm Irea. And that despite the slowdown in Cataluña, where no transactions have been closed since the referendum was held on 1 October. Nevertheless, “the impact of the uncertainty in Cataluña will make it hard for the investment data seen in 2017 to be repeated”, says Miguel Vázquez, Partner in the firm’s Hotels division.

For the time being, the incessant arrival of tourists in Spain (the country welcomed more than 82 million foreign visitors in 2017, almost 10% more than in 2016) is continuing to spark investor interest. In fact, in 2017, investment in holiday hotels comfortably exceeded financing in the urban segment (69% vs 31%), rebalancing the trend seen in 2014 and 2015.

Moreover, destinations that had remained quiet following the crisis were revived. Málaga rejoined the list of investors’ preferred destinations, accounting for 15% of total investment with 18 transactions amounting to €516 million. The Canary Islands retained its position as the favourite investment destination, accounting for €939 million of investment, representing 27% of the total volume. Madrid was the main destination for urban investment once again, with €637 million (including existing hotels and the acquisition of properties to convert them into hotels), ahead of Barcelona, which recorded €422 million.

Last year in Spain, 182 hotels were sold, containing 28,813 rooms, compared with 147 hotels and 21,646 rooms in 2016. That represented an increase not only in terms of the number of assets but also in the average price paid per room, which amounted to around €119,000, approximately 30% higher than the average price paid in 2016. In 2017, conversion projects and transactions involving land for the construction of hotels recorded a combined investment volume of €478 million, representing an increase of 139.8% compared to 2016, according to Vázquez.

Offices and residential assets

Offices were the third favourite assets for investors, accounting for investment worth €2.210 billion. Nevertheless, it was the only segment that recorded a decrease in absolute terms with respect to the prior year, with investment in this asset class falling by 20%. That reduction was driven by data in Madrid, given that investment in the Spanish capital fell by 38% with respect to the previous year – €1.374 billion – whilst in Barcelona, the investment volume amounted to €835 million, equivalent to an increase of 60%. Nevertheless, according to Borja Ortega, Director of Capital Markets at JLL, “that decrease was not due to a decline in investor interest, but rather a lack of product on the market and the fact that the previous two years saw record-breaking figures”.

Investment in land also stands out, since it amounted to a record volume of €109 million in Barcelona and €193 million in Madrid; moreover, that trend is expected to continue in 2018.

But it was investment in the residential sector – the purchase of entire buildings and land – that really soared in 2017. It amounted to €2.082 billion, which represented an increase of 160% with respect to the €802 million recorded in 2016. In Cataluña, residential investment amounted to 145% to reach €444 million.

Original story: El País (by S. L. L.)

Translation: Carmel Drake

Banco Santander Puts Hotel Koral up for Auction

6 December 2017 – Levante EMV

Banco Santander has put Hotel Koral, located on the beachfront in Oropesa del Mar, up for auction for €7 million. The establishment has 210 rooms and a swimming pool. The auction is open until 11 December.

The bank took ownership of the property as the result of a debt that it had granted to the previous owners, amounting to €2,127,677. Moreover, the property has another charge over it in the form of an unpaid loan amounting to €700,000 from Cajamar, according to sources close to the operation. The investor that offers the highest bid will acquire the property free of charges. All of the information about the bid is available on the BOE’s auction website.

The electronic auction opened on 21 November. The value of the auction is €7,082,465 and interested parties must pay a deposit of €354,123. According to information provided yesterday on the BOE’s auction website, no bid has yet been formalised for the property.

The building is located on the new promenade in the Tosalet de Oropesa area. The hotel is a ten-minute walk from the centre of Oropesa. The establishment offers 210 rooms with views of the sea or the pool, which is located in a garden area with sun beds and parasols.

The bank has put the property on the market at a time when there is a great deal of investor interest in hotels. Hotel profitability has grown by 32.5% in Valencia due to the strength of international tourism and the recovery in domestic consumption, according to a report by the consultancy firms STR and Magma Hospitality Consulting.

The growth in hotel profitability in the Community of Valencia is much higher than in Madrid (18.6 %), Málaga (15.38 %), Barcelona (14.6%), Marbella (14.5 %) or Sevilla (14.4 %). The strong performance in terms of profitability is being seen despite competition from tourist apartments, which are being marketed through online platforms such as Airbnb.

The barometer from STR and Magma HC is based on data from 145,000 rooms in more than 800 hotels located all over Spain. Data corresponding to the first half of 2017 shows a very positive trend with double-digit growth for the main indicators in key destinations and a general upward trend in terms of average revenues per available room (RevPAR) and in the average price per occupied room.

The good context for divesting has led other banks to follow the same path. Banco Sabadell has just sold its hotel manager HI Partners for €0.63 billion to the US fund Blackstone. That operation included a portfolio of fourteen hotels worth almost €0.7 billion, including the Abba Acteón in València and the Melià Villaitana in Benidorm (…).

Original story: Levante EMV (by Ramón Ferrando)

Translation: Carmel Drake