CBRE: Real Estate Inv’t Will Exceed €13,000M In 2017

5 October 2017 – Expansión

Real estate investment in Spain is continuing to enjoy happy times, with on-going growth and record-breaking figures.

Between January and September, €10,300 million was spent on real estate assets, up by 58% compared to the same period last year, say sources at the real estate consultancy firm CBRE. Between July and September, the volume of investment moderated with respect to the “extraordinary figures” recorded during the first half of the year, to amount to more than €2,700 million. “This data is very positive and confirms investors’ appetite for the Spanish real estate sector”, said Adolfo Ramírez-Escudero, President of CBRE España.

By type of property, retail assets and hotels are the investment focus, accounting for 26% and 23% of the total, respectively, although all of the assets are experiencing growing interest. “Domestic and international investors are continuing to see Spain as a market with great potential and are showing interest in the full range of asset types”, say sources at CBRE.

In total, the retail sector accounted for €2,700 million of the total investment during the first 9 months of 2017, comprising both shopping centres and high street premises. Meanwhile, operations such as the purchase of Edificio España by the hotel chain RIU for €272 million increased investment in hotel assets during the first nine months of the year, by more than 122% with respect to the same period in 2016, to reach €2,390 million. Another type of asset that saw an exponential increase in its investment was the logistics business, which grew by 153%, to amount to more than €1,500 million. In the case of offices, investment rose by more than 38% to reach €1,542 million, whilst investment in residential assets fell by 32% to €617 million.

Buyer profile

By nationality, overseas investors accounted for 67% of the total volume spent, compared with domestic buyers (22%) and Socimis (10%) – which, although they are Spanish companies, are mostly financed by international capital -. “Last year, Socimis accounted for 43% of real estate investments. Nevertheless, this year, their role has been moderated and they have only participated in 10% of the transacted volume”, explain sources at CBRE.

The replacement of Socimis – which are focusing on managing their portfolios and selling their first non-strategic assets this year – is being led by foreign funds, with new profiles and nationalities closing operations in Spain. Such is the case of the Australian firm Macquarie, which has purchased Empark.

In fact, overseas investment in 2017 has been led by buyers from the Middle East and Asia Pacific, which account for 31% of the total volume of international investment. They are followed by US funds, which account for 18%, and buyers from France, with 17% of the total share, say sources at CBRE. “Overseas investment has increased by 73% with respect to the same period last year, to reach €6,747 million, backed by an increase in investment from most countries, with the exception of the USA and Germany, whose investment volumes have decreased by 36% and 48%, respectively.

Thanks to the good behaviour of the market during the first 9 months of the year, experts predict that 2017 will close with investment of more than €13,000 million, in line with the volumes registered in 2016 and 2015, which were characterised by several large corporate operations.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Engel & Völkers: House Prices Soar In Ibiza

21 July 2017 – Eje Prime

The real estate market in Ibiza is continuing to rise. Demand for high-end housing in Ibiza continues to significantly exceed the available supply, which has led to an increase in the prices registered on the island over the last year, according to a study prepared by the German real estate consultancy firm Engel & Völkers.

In its Ibiza Markets Report, the company explains that over the last year, it has sold homes to clients of 17 nationalities. Although most buyers on the island came from Germany, for the first time in almost ten years, Spaniards were the second largest group of house buyers.

The nationality of the other main house buyers included people from the United Kingdom, France, Switzerland, Italy and the Benelux countries. “Ibiza is still one of the favourite destinations for the international jet set and retains its leadership position in the Balearic Islands as the island with the most private flights”, say sources at the consultancy firm.

One of the most sought-after areas on the Balearic Island is the city of Ibiza and its surrounding areas. The redevelopment of the old town will be completed this year and so new luxury hotels will soon enhance the exclusivity of that area. In this sense, luxury villas measuring 350 m2 saw their prices increase by 14.2% in 2016 to reach €4 million.

Properties range from contemporary designer villas to traditional estates. The asking prices for villas measuring 350 m2 start at €3.5 million, whereby exceeding the figure of €3 million paid in 2015.

Entry prices for villas measuring around 350 m2 in very good locations rose to €2.6 million in 2016 compared to €2.5 million in 2015. “We are convinced that the growth of the real estate market will continue for the rest of the year in Ibiza”, predicted Florian Fischer, Director General of Engel & Völkers España.

The consultancy firm forecasts that the high level of demand will continue, both from domestic and international buyers, for primary and secondary residences on the Balearic Islands, primarily in the most premium segment, where the limited number of exclusive properties will lead to further price increases over the long term.

Original story: Eje Prime

Translation: Carmel Drake