Business Confidence Plummets to Record its Greatest Decrease since 2013

Business confidence in the second quarter of this year has decreased by 26.9% compared to Q1, a record low that marks the largest decline in the series since it began in 2013.

The National Institute of Statistics (INE) has published the Harmonised Business Confidence Index (ICEA), which stands at 95.5 in the second quarter of 2020, its lowest value in history. Transportation and hospitality (−32.4%) recorded the greatest decrease, followed by construction (-29.3%). For its part, industry (−23.3%) registered the lowest decrease.

75% of the companies surveyed by the National Institute of Statistics consider that the outlook for their businesses for the period April to June is poor and, therefore, the performance of their businesses will be unfavourable. And only 3 out of 100 companies believe that they will see a positive evolution in the coming months, whilst 22% do not foresee any major change in their activity.

Offices & Logistics Assets will Drive Spain’s Real Estate Sector over the next 5 Years

20 September 2018 – Eje Prime

Spain is consolidating its position as one of the most powerful real estate markets in Europe. The Spanish real estate sector has been strengthened in recent years by the creation of employment and, in particular, by investments undertaken in the office and logistics segments. Looking ahead, it is expected that the scarce supply of these assets will lead to a rise in prices, especially in Madrid.

The sector expects the office business to maintain an upward trend over the next five years in light of the outlook for the creation of employment in Barcelona and Madrid. During this period, both cities are predicted to generate around 200,000 to 300,000 jobs, respectively.

Good news is also expected in the logistics sector. Above all thanks to the boom in e-commerce, the market for industrial centres and warehouses in Spain is currently one of the most powerful in Europe. Despite the great demand for assets, in cities such as Barcelona and Madrid, the rate of available stock stands at just 4%, which is pushing rental prices up. For DWS, the challenge until 2022 will be to “adapt existing buildings to the new needs of companies”.

In terms of the rest of Europe, an increase of 2% per year is expected in the prime office market. Together with Madrid and Barcelona, other areas that will see an increase in demand for such spaces until 2022 include Berlin and the financial district of Paris.

Logistics will be, undoubtedly, the most dynamic segment of the European real estate sector over the next five years. It is expected that, in light of an availability rate for industrial spaces of 5% in most of the large cities, rents will rise by 2.2% per year, on average. Germany, the UK and Poland are expected to lead that growth.

Original story: Eje Prime 

Translation: Carmel Drake

AXA Buys 850 Prime Residential Assets in Spain for €170M

20 December 2017 – Eje Prime

AXA is redoubling its commitment to Spanish real estate. Two weeks after formalising the purchase of the largest portfolio of student halls in Spain, through a joint venture with CBRE, for which it paid Resa €0.5 billion, the investment arm of the insurance company has acquired 850 prime residential assets from Goldman Sachs and B Capital. This operation has been signed for €170 million.

Most of the homes purchased by AXA are located in the central areas of Madrid and Barcelona. Moreover, fourteen of the properties have been built since 2005 and the remainder have all been renovated within the last fifteen years. As such, the portfolio comprises luxury homes, which the company will revalue over the next few years by putting them up for rent.

Hermann Montenegro, Director of Investments at AXA Real Assets, also said that “the purchase of this portfolio of high-quality residential assets reflects our confidence in the residential markets in Madrid and Barcelona, where the growth in rentals has increased and the outlook for the next few years in terms of demand is very favourable.

This investment forms part of a long-term plan by AXA Real Assets to invest in sustainable and growth markets. In this context, in the last year, it has undertaken investments in Finland, Germany and the USA, amongst others.

Original story: Eje Prime 

Translation: Carmel Drake

KPMG Surveys 148 Directors In The RE Sector

19 May 2017 – Expansión

Directors and entrepreneurs in the real estate sector have faith in the progress of their industry. Moreover, more than half of them believe that the recovery is not very consolidated yet or is still pending consolidation, according to the conclusions of the Outlook for Spain 2017 report, prepared by KPMG in collaboration with the Spanish Confederation of Business Organisations (CEOE), on the basis of the opinions of 148 directors in the sector.

According to the report, 55% of those surveyed think that the recovery is not very consolidated yet or is still pending consolidation and 63% believe that prices will continue their upward trend.

In terms of the perception of the current situation in the sector, 28% consider it to be good or excellent, compared with 35% who consider it to be ok. The prospects for the next 12 months are more optimistic, given that 45% expect the situation in the sector to improve.

Similarly, 91% of directors confirm that during the course of this year, they are going to continue to maintain their levels of investment and may even increase them, and 27% expect to see an increase in their turnover during 2017.


Regarding the future challenges facing the sector, more than half of the directors surveyed believe that a weakness in demand is the main threat to their businesses.

The respondents also agree that investment in the sector has already reached a high level of maturity. In this way, 40% of those surveyed believe that there is a risk of a new real estate bubble forming over the next few years and one in five regarded that risk as “high”.

Over the next few months, 32% of the directors think that they will focus on international expansion and 25% consider the digital transformation as a strategic priority.

For Javier López Torres, Partner for Real Estate at KPMG in Spain, the current situation in the sector can be explained by differentiating between three scenarios or speeds: those where asset types and location are combined with liquid demand, in such a way that in “general terms”, the reactivation is already being consolidated; those where players are starting to invest and build certain asset types in specific locations; and finally, those where the absorption of specific products will be very slow, given that it does not respond to a real current demand.

Original story: Expansión (by R.A.)

Translation: Carmel Drake

JLL: Rental Prices Will Continue Rising In Madrid & Barcelona

11 April 2017 – Idealista

According to the residential rental clock prepared by JLL, the main residential rental markets in Europe and the Middle East are forecast to grow over the next few months. Whilst London, Berlin and Lisbon will see slower rises, rental prices in the centre of Paris, Dubai, Barcelona and Madrid will see accelerated increases.

According to the analysis conducted by the consultancy firm JLL, 15 large cities in Europe and the Middle East will register increases in residential rental prices over the next few months. The so-called Property Clock surveys the performance and outlooks for the main residential markets on the continent, and the results indicate that rental prices are going to grow in the short term.

The consultancy firm believes that given the particularities of each market, it is common for pressure to be exerted on rental house prices, due to increases in demand, in the face of supply that is not capable of absorbing it.

“There is a critical imbalance between demand and supply. A rapid demographic change is creating population pressure on the large metropolitan centres. There are not enough homes to alleviate this pressure and that is causing prices to rise”, says Philip Wedge-Bernal, Residential Analyst in EMEA for JLL.

This change means that, in one year, cities such as Dubai and Paris have gone from seeing rental prices fall, to seeing them bottom out and grow again, all in quick succession, with rises of 1.3% in 2016.

Cities such as Dublin, Warsaw, Amsterdam, Madrid and Barcelona will see more accelerated increases in the price of rental homes, whilst prices in London, Copenhagen, Manchester, Berlin, Frankfurt, Helsinki, Stockholm and Lisbon will also grow, but at a more moderate rate.

“The pace of recovery is affected by the political and economic uncertainty. The elections in the main European countries will probably affect confidence in the market, which will have a negative effect on the growth in rental prices”, said Wedge-Bernal.

Original story: Idealista (by D. Marrero)

Translation: Carmel Drake

Will 2017 Be The Year Of Mergers Between The Socimis?

24 February 2017 – Expansión

The Socimi boom continues unabated. Ores – the listed real estate investment vehicle owned by Bankinter and Sonae Sierra – debuted on the Madrid stock market on Wednesday, and in doing so became the thirty-first company of its kind to have its shares traded on the MAB (Alternative Investment Market). Moreover, all indications are that this phenomenon is going to continue to grow.

An attractive tax regime and capital appetite for real estate assets has led to a flood of Socimis debuting on the stock market in recent years.

Heading up the list of Socimis, by size, are Merlin – the only real estate company whose shares are traded on the Ibex – Hispania, Lar España and Axiare. These four companies, which debuted on the Madrid stock exchange between March and June 2014 with €2,560 million to invest, now own a combined portfolio worth more than €10,500 million.

In addition to these Socimis, there are around thirty other companies that have joined the MAB in recent years. Following the tsunami that the real estate sector has experienced in just three years, the question now is: What will happen next?


According to a report prepared by CBRE, “In 2016, the number of Socimis is expected to continue growing. Nevertheless, given that an increasing number of Socimis are competing in a somewhat limited market, it is likely that 2017 will be a year in which there is pressure for them to increase in terms of size and specialisation, with the aim of obtaining competitive advantages, driving merger and acquisition activity, and selling off non-strategic portfolios of assets between Socimis”.

In this sense, it is expected that existing investment vehicles owned by family offices and private banking will be converted into Socimis. The experts at CBRE point out that pooling assets into existing investment vehicles, in return for ownership stakes in them, generates value growth for investors. (…).

The analysts also point out that the Socimis are likely to move towards more specialisation in the future. In this sense, Hispania is planning to focus its activity on hotels, whilst it divests its residential business and rotates its offices. (…).

Merlin – the largest real estate company in Spain and one of the ten largest Socimis in Europe – decided to sell off its portfolio of hotel assets to Foncière des Regions for €535 million to focus on its significant office portfolio, which has just grown thanks to the Socimi’s acquisition of the iconic Torre Gloriés building, also known as Torre Agbar (pictured above), in Barcelona, for €142 million.

Meanwhile, Axiare is focusing above all on offices, whilst Lar España is centring its attention on shopping centres.


Operations such as Merlin’s purchase of Torre Agbar on 12 January and Axiare’s acquisition of the headquarters of Capgemini and PSA last month reflect the fact that, after the record investment figure recorded in 2016 – €14,000 million, a figure hitherto unseen in Spain – the real estate market is still very attractive.

“We expect 2017 to also be a very active year for the Spanish investment market (…)”, say sources at CBRE (….) thanks to the more attractive returns being offered by the real estate sector compared to other sectors, the outlook for economic growth across Europe and the continuous improvements in financing (…).

Original story: Expansión (by R.Arroyo and R.Ruiz)

Translation: Carmel Drake

Manuel Jove Joins Forces With BBVA To Construct New Homes

8 November 2016 – La Opinión A Coruña

Inveravante, the corporation owned by the A Coruñan businessman Manuel Jove, has joined forces with Anida, the real estate arm of BBVA, to create a new firm, Avantespacia Inmobiliaria, which will focus on building new homes in Spain, according to a statement made today by the two companies.

During the initial phase, the partnership will build 850 new homes in the centre of several cities such as Madrid, Málaga and Las Palmas de Gran Canaria and, in a second phase, it will take on other new developments, also in large capital cities.

With this initiative, the Galician businessman makes a return to the residential property development business in Spain, given that it is the first project that he has undertaken in the sector in the last decade, following the sale of Fadesa to Martinsa in 2006. Nevertheless, during the intervening years, through Avantespacia, the real estate division of Inveravante, Jove has developed housing complexes in cities in the north of Africa, specifically in Casablanca and Tanger, and is considering embarking on projects in Mexico and Brazil.

Now, “given the strong outlook for the real estate sector in Spain”, Jove’s firm and the subsidiary of BBVA have decided to unite some parts of their respective buildable land portfolios in a return to house construction.

Inveravante will control 70% of the partnership, called Avantespacia Inmobiliaria, whilst Anida will own the remaining 30% stake.

The two partners have already launched their first project in Malaga, involving the development of 135 homes, which will be constructed on a plot of land formerly owned by Tabacalera, in one of the areas “with most potential” in the city, next to the new Paseo Marítimo.

The next initiatives, which have already been put on the market, will be undertaken in Madrid, on Calle Francisco Silvela and in the neighbourhood of Las Rosas.

Avantespacia will be in charge of the architecture and construction aspects of the properties, as well as the marketing, although the homes will be included on BBVA’s specific websites. Manuel Jove used to be a shareholder of Spain’s second largest bank.

Original story: La Opinión A Coruña

Translation: Carmel Drake

IPE: House Prices Will Rise By 5% In 2016

18 July 2016 – Expansión

The recovery of the real estate sector began in 2015, and we are now (in 2016) seeing the consolidation of the end of the crisis, with increases in: property prices, the number of transactions, the number of housing permits and rentals, spreading across the whole country.

After seven years of crisis in the sector, the improvement in 2015 might have seemed like a mirage to many, a temporary bounce or a small sign of stabilisation. Nevertheless, the figures for 2016 are showing that the outlook is strong and that the housing market still has great potential, which means that we no longer need to talk about “blossom in the greenhouse” or an incipient recovery, but rather future growth.

The scenario outlined by the Institute of Business Practice (IPE) in its next edition of the Real Estate Pulsometer, shows a very favourable outlook for the sector, in which average transaction prices will grow by 5% and the volume of sales will increase by 13.9% with respect to 2015. All of this will act as a driver for the rest of the sector, which is also being boosted by construction activity. Thus, the number of projects launched will increase by 9.3% and the number of permits for new homes will grow by 13.9%. It seems that the sun is already shining on all of the major indicators in the real estate market.

In addition to this data, we are seeing a gradual and increasingly rapid recovery of the rental market; a strong increase in the yield on homes; and a clear recovery in the non-residential sector, which set record breaking figures in 2015 and is following a positive trend so far in 2016, with fewer operations, but higher prices.

The indicator that best indicates the recovery of the real estate sector is the number of transactions, which grew by 11.1% in 2015 and which is forecast to rise by 13.9% this year. In addition, the increase in sales does not depend only on purchases by those with significant savings…, which was the main driver of the market in years gone by, but in very specific areas.

More mortgages

During 2016, the opening up of the bank loan tap will drive mortgages up by 10.5% (compared with a miniscule increase of 0.6% in 2015), which will allow buyers to return to the market in search of primary residences, even if they only have small amounts of savings. This means that the improvement in the market will extend to other provinces and neighbourhoods that have not featured on the radars of investors in the past.

In addition, this recovery will also affect plots of land, as well as garages, offices and storerooms, to reach 787,839 operations (up by 10.2%) compared with last year. In total, more than half of these transactions are expected to involve homes.

Based on the data to May, the highest increases in house sales are being seen in the Balearic Islands (where purchases grew by 38.6% between January and May, with respect to the same period last year), followed by Murcia (28.9%), País Vasco (24.3%) and Extremadura (21.7%), according to INE. Nevertheless, the Institute of Business Practice forecasts that, during the year, Madrid, Cataluña, Valencia and the Canary Islands will also see some of the most significant increases. (…).

Original story: Expansión (by Pablo Cerezal)

Translation: Carmel Drake

Do The Socimis Represent A Good LT Investment?

31 May 2016 – Expansión

After a great 2015 on the stock market, the Socimis have slowed down their pace (of growth) on the stock exchange during the first five months of the year. The four largest firms in the market, Merlin, Hispania, Lar and Axiare have all recorded losses in their market capitalisations, amounting to 14.79%, 6.64%, 5.48% and 1.21%, respectively, even though their businesses are continuing to perform well and their results for the first quarter more than fulfilled analysts’ expectations. Why are their shares not soaring on the stock market in 2016? What are the expectations for these companies over the medium and long term?

Analysts agree that there will be a before and after in the general elections because few sectors are as sensitive to the political landscape as the real estate market and because at stake is the tax regime applicable to these vehicles, which specialise in leasing out properties, and which currently enjoy significant tax benefits. On the one hand, they are exempt from Corporation Tax and they also enjoy rebates of 95% on other taxes.

With some important milestones on the horizon, no one expects to see any great joy in the short term. “The political uncertainty means that some of these companies are trading below their net asset value. At the moment, we do not know whether the next Government will encourage real estate investment”, explains Alejandro Martín, from Metagestión. And these concerns are shared by the large international analysis firms. Companies such as Goldman Sachs have reduced their outlook to neutral for some of the major companies in the sector, until the political panorama becomes clearer.

“Until the elections, the Socimis are going to move in a sideways-downwards range”, says José Lizán, manager at Auriga, who thinks that the market’s greatest fear involves a possible change in the tax regime for these vehicles, which would likely happen if Unidos Podemos obtains any weight in a future Government. The coalition has already announced that it plans to make changes to the rules of the game for Sicavs, Socimis and private equity firms. (…).

Over the long term

But expectations change radically (provided the largest threats facing the sector do not materialise) over the medium and long-term, in light of the strategies that the Socimis have put in place and the evolution of their results quarter by quarter. The four largest Socimis almost tripled their profits during the first three months of 2016, to €73 million, with average annual yields of around 5%. (…).

For José Lizán, the best strategy is to “purchase with a 10 or 12 year outlook. The Socimis’ shares are going to perform like bonds”. The manager at Auriga backs the four largest listed companies in the sector because “they made their first purchases at significant discounts in prime areas of Spain’s largest (regional) capitals. Now, occupancy rates are increasing in the major cities and the operational side of their businesses is going very well. In addition, they are taking out debt whilst interest rates are very low”. (…).

Original story: Expansión (by E. Utrera)

Translation: Carmel Drake

Bankinter: 53,000 More Homes Will Be Sold In 2016

22 February 2016 – Expansión

The recovery of the real estate market is growing from strength to strength and according to Bankinter, in its latest report about the sector, around 420,000 homes will be sold this year, in other words, 53,000 more than in 2015. But, what is driving this growth spurt?

The entity’s analysis predicts that the upswing will continue into 2017, when it forecasts that 450,000 operations will be closed.

Above all, demand for homes is going to be driven by the “improvement in employment, reduced financing costs and the increasing attractiveness of homes as investments”, says the report.

Moreover, “the combination of higher demand and a limited supply in the major cities will result in an increase in average prices in 2016 and 2017 of almost 3% p.a., a figure that could reach 5% in prime areas”, predict the experts at Bankinter.

A new feature of the real estate sector compared with 2015, will be the increase in number of new homes, in light of the upturn in new housing permits registered last year”. However, the analysis warns that this improvement will only happen “provided the political context does not result in a loss of confidence”.

Below, we detail the factors that are expected to drive house sales this year:

1 – Economic growth and an improvement in employment

Bankinter highlights that the Spanish economy is going to grow by more than 2.5% in 2016, a rate that will facilitate the continuation of the positive trend in the labour market over the next few quarters. And it adds that “the increase in the number of people in work (by 525,000, of whom 171,000 have permanent contracts) may represent a catalyst in terms of the demand for housing”.

2 – Low financing costs

Another factor…is the low rates of interest, a scenario that the bank expects to continue until the end of 2017. “12-month Euribor will remain close to 0% in 2016 and the conditions for accessing credit will continue to improve”, according to its forecasts. (…).

3 – Favourable yields compared with alternative investments

The report argues that the gross yield from housing rentals compares favourably to other investment alternatives, such as long-term deposits and fixed income securities, which are currently offering yields of around 0%. (…) …. meanwhile, “gross yields on residential investments may reach 4.0%…”.

4 – “Cultural” trend towards buying homes

The culture of ownership versus renting has survived the crisis in Spain. In fact, despite the fact that demand and the possibilities for accessing housing reduced significantly during the recession, “the percentage of rental homes still remains low (compared with the European average) and has barely increased in recent years (the current rate stands at 21%, up from 17.2% in 2011)”, explains the document. (…).

5– Market outlook

Bankinter also highlights the positive influence of the strong outlook for the market. Specifically, the entity forecasts that housing sales will grow by 6.5% this year and that the favourable conditions in the real estate market will continue into 2017. (…).

No chance of a return to the boom figures

Nevertheless, Bankinter also stresses that, despite the good times being enjoyed by the property sector at the moment, the recovery “does not represent a return, in any way, to the levels of demand seen during the real estate boom years”. The study points to various factors to explain this, such as the declining population (due to the negative migration balance), the awareness that property prices may indeed decrease and, in particular, the fact that the unemployment rate will remain above 17.5% until the end of 2017. These aspects “represent structural changes in the market, which mean that levels of demand exceeding 900,000 homes per year are no longer attainable”.

Original story: Expansión (by B. Amigot)

Translation: Carmel Drake