Tag: purchase market

CBRE GI to Invest €800M in Spain in 2018

18 May 2018 – Expansión

The real estate asset manager CBRE Global Investor (CBRE GI) is redoubling its commitment to Spain. After ending last year with a record investment of €800 million and starring in several mega-operations, the firm wants to establish a new record this year, exceeding the milestone set in 2017. From its offices in Madrid, CBRE GI manages assets worth €3.2 billion in the retail, office, logistics and student hall sectors, located in Spain and Portugal, and is getting ready to enter the residential sector.

“Last year was very important given the significant transaction activity undertaken, of which €800 million corresponded to purchases. This year, we hope to match that figure and even exceed it”, explained Antonio Simontalero, Head of Operations for Spain and Portugal at CBRE GI, speaking to Expansión.

The firm works with eight funds and owns a portfolio comprising 19 shopping centres, 37 logistics platforms, three office buildings and 33 halls of residence for students.

Although retail is still the main market for the manager, accounting for 70% of its portfolio, CBRE GI has decided to attack new businesses. Thus, last year, it entered the market for student halls with the purchase, together with AXA IM Real Assets and Greystar, of Resa, the market leader in Spain, for €400 million. “We are continuing to analyse opportunities in the student hall market. We want to grow the portfolio and increase our exposure”, says Antonio Roncero, Head of Transactions for Spain and Portugal at CBRE GI.

Another milestone in 2017 was the consolidation of the manager in the logistics sector following the joint venture signed with Montepino for the development and promotion of logistics assets. “The initial objective of the investment in the joint venture with Montepino was €300 million, but we hope to exceed that figure soon. With the developments underway, we have 80% of the investments committed”.

Simontalero points out that CBRE already had 700,000 m2 of logistics assets under management and the agreement with Montepino will allow the firm to exceed the 1 million m2 threshold. The logistics sector is thereby becoming the manager’s second segment by volume, accounting for almost 15% of its total assets. “The differentiating feature of this joint venture is that all of the assets are going to be latest generation, which is what the main operators require”, adds Roncero.

Rental homes

In terms of next steps, CBRE GI is preparing to attack a new market, specifically, the residential rental market. “We are analysing various options with different partners, either through the development of new-build properties or by investing in a business through the purchase of portfolios”, say the directors.

For Simontalero, the size of the rental market vs. the purchase market in Spain is going to grow and will move into line with the rest of Europe. “There is latent demand that is not being fully satisfied with the current supply in the market”, he said.

For Roncero, the key is in the service. “We see an opportunity for offering a professionalised service in the rental home segment, providing security to the tenant and placing emphasis on the maintenance of properties”.

Roncero says that the objective of CBRE GI involves gaining “critical mass” in the sectors to which it is least exposed in order “to diversify and be more versatile”.

Sales

In addition to growing its portfolio with new properties, the company is continuing to rotate its assets. Specifically, last year, it sold four shopping centres (two in Spain and two in Portugal), and it is now preparing to sell three more – Gran Casa (Zaragoza), Valle Real (Cantabria) and Max Center (Barakaldo) – whose ownership it shares with Sonae.

“Our business involves identifying investment opportunities, managing them and selling them to generate returns for our investors”, he said.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

Servihabitat: House Prices Will Rise By 3.8% In 2016

2 June 2016 – Expansión

The increase in demand, the reactivation of investment activity and the improvement in access to mortgage financing are some of the factors behind the marked improvement in the residential market.

In its report entitled “The Residential Market in Spain”, Servihabitat, which is jointly owned by TPG and CaixaBank, says that “the positive trend experienced in house prices/values in Spain during 2015 will be consolidated this year”. The largest price rises are forecast in the Balearic Islands (+6.8%), the Community of Valencia (+4.6%), Cataluña (+4.4%) and the Community of Madrid (+4%).

The average price rise across Spain is expected to amount to 3.8%, which is 2.4 points below the figure (6.2%) forecast by Servihabitat in November. This lowering of expectations may be due to the fact that prices actually accelerated at the end of last year. In addition, “there is a certain amount of volatility because the realities of the sector are very different by area”, said Julián Cabanillas, CEO at Servihabitat.

The report predicts “that this year, the rate of growth will continue” in terms of the sale and purchase of residential properties, driven “by pressure from increased demand”. Specifically, in 2016, the number of operations is expected to grow by almost 10% YoY, which means that more than 440,000 homes will be sold in total.

The autonomous regions where sales activity is expected to increase by the most this year include: Asturias, Cataluña, País Vasco, the Community of Madrid, La Rioja and the Community of Valencia, as well as in the Canary and Balearic Islands, all of which have a forecast YoY variation of more than 10%. The only region where sales are expected to decrease is Extremadura (-0.6%). (…).

The report also forecasts YoY growth of 12.5% in terms of the number new homes that will be completed this year, to reach 50,800 units.

The volume of new build stock will continue to decrease by approximately 25%, from 492,000 homes last year to 367,500 by the end of 2016, according to the study. (…).

Boom in the rental sector

The study points out that, according to Eurostat, the rental market in Spain has grown significantly in recent years. “More than 21% of Spaniards live in a rented home, a figure that brings Spain ever closer to other European countries with more tradition in this regard. In addition, the forecast until the end of the year shows that the number of rental operations will remain stable or increase with respect to the number of sale and purchase operations, at the same time as rental prices are forecast to stabilise”

On the other hand, the company highlights that more than 17% of purchases in Spain were made by foreigners in 2015, who acquired more than 69,000 homes in total, for both residential and holiday use. “The concentration in just eight provinces is noteworthy: Alicante, Santa Cruz de Tenerife, the Balearic Islands, Málaga, Girona, Las Palmas, Murcia and Almería”, adds the report.

Original story: Expansión (by Juanma Lamet)

Translation: Carmel Drake