Tag: record

C&W: Inv’t In RE Assets Amounted To €10,300M During YTD Sept

20 October 2017 – Expansión

The interest from investors in the Spanish real estate sector is far from slowing down; in fact, it has intensified in recent months. Specifically, during the 9 months to September, the total volume transacted on direct purchases, in other words, excluding corporate operations, amounted to €10,300 million, up by 74% compared to the same period last year, whereby exceeding the figure recorded during the whole of 2016, according to a report compiled by Cushman & Wakefield.

The report also forecasts that “the appropriate environment for investment that Spain offers” will allow the volume of investment in direct purchases to reach €12,000 million by the end of the year.

By area, one of the best performing segments so far this year has been the retail sector (retail premises, stores, shopping centres, retail parks and outlets). Between January and September, €3,100 million was invested in the segment, which represents 30% of the total investment in the real estate sector. The consultancy firm calculates that the investment volumes for the whole year could reach record levels, last seen in 2015, when purchases amounting to €4,150 million were made.

Offices were the second most sold asset by volume, with a 24% share of investment. Investment in offices during the first nine months of the year reached €2,500 million, of which almost €1,500 million corresponded to Madrid and €816 million to Barcelona.

Tourism is still one of the main attractions for investors. Hotel investment rose by 67% during the 9 months to September, to €2,000 million, thanks to the push from the Costa Brava, Costa del Sol, Palma de Mallorca, Canary Islands and Madrid.

Another niche segment with a strong outlook is the logistics sector. Cushman & Wakefield forecasts that investment in that area will amount to €1,000 million in 2017. The consultancy firm explains that the good figures in terms of leasing and the scarcity of high-quality assets are boosting the development of land up to 500,000 m2, in both Barcelona and Madrid.

New opportunities

In addition to the traditional segments, investors are paying attention to alternative assets, such as student residences, parking lots and petrol stations, which generate better returns.

In terms of the forecast evolution, the consultancy firm explains that the major activity recorded in recent years will result in a lower level of supply and will incentivise new acquisition formulae with indirect purchases through corporate operations and joint ventures. Moreover, the new cycle of property development will encourage investors to participate in the initial phases of developments, whereby redistributing the burden of property developer risk and facilitating investment.

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake

 

JLL: RE Inv’t Amounts To c.€6,000M In H1 2017

27 June 2017 – Expansión

Investment in the real estate sector is registering record-breaking figures in the Spanish market once again. With three days left until the end of the first half of the year, the sale of buildings and land during the first six months of 2017 amounted to €5,991 million, according to the real estate consultancy firm JLL. “There is a lot of money ready to invest in Spain and when products come onto the market, the interest is unleashed. Investors still think that Spain has a lot of potential and that rents are going to rise, accompanied by the forecast economic growth in the country”, explained Borja Ortega, Director of Capital Markets at JLL.

The real estate investment of almost €6,000 million represents an increase of 70% compared to the figure recorded during the first six months of 2016 (€3,548 million), of which €3,000 million corresponded to non-residential asset purchases.

By type of property, offices and commercial assets account for most of the operations. “There is complete faith in Spain, with a clear commitment to both Madrid and Barcelona, and investors continue to seek out good spaces, which they will be able to lease easily”, said Ortega.

In the case of offices, the volume invested during the first six months of 2017 amounted to more than €1,200 million, up by 55% compared to the first half of last year. However, the forecast for 2017 as a whole is that office investment will reach €2,400 million, in line with 2016. During the first few months of 2017, several major operations were completed, such as the sale of Torre Agbar in Barcelona – which was acquired by the Socimi Merlin for €142 million – and the purchase of the Isla Chamartín complex in Madrid, which the fund Lone Star sold for €103 million. “In the case of Barcelona, the cumulative investment volume recorded since the start of the year amounts to €510.65 million, which means that it is almost equal to the total amount invested during the whole of 2016, when €521.50 million was spent in the city – this demonstrates the strong investor appetite that has characterised this first half of 2017”, said sources at the consultancy firm.

Towards a record year

Like in 2016, commercial assets (in particular, shopping centres) have knocked offices off of the top of the ranking as the asset that accounts for most investment. In this way, so far in 2017, investors have spent more than €2,400 million on commercial assets. Their purchases include the shopping centre that has starred in two operations in the last six months: Xanadú. This establishment, which is located in the Madrilenian town of Arroyomolinos, was acquired at the beginning of the year by the British group Intu Properties, which paid the fund Ivanhoe Cambridge €530 million. Three months later, Intu sold 50% of the centre to the manager TH Real Estate for €264 million.

The strong performance of the Spanish real estate sector during the first half of the year means that it is lining itself up for a record year. “Whilst last year, investment amounted to around €9,500 million, this year, I am sure that it will rise by 15%, to reach figures close to the records of 2007″, said Ortega.

In this sense, it is expected that several new operations will close before the end of the year, such as the sale of the Socimi Hispania’s office portfolio, worth €550 million; and of logistics land to be developed and the batch of Rea residences, by the manager Azora. “Now, the core funds are going to play a greater role, taking advantage of the exit of other more opportunistic and value-added investors, which are going to start selling off products that they purchased in recent years”, said the director at JLL.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

Tinsa: Investment In Coastal Housing Soars

19 June 2017 – Expansión

Guide for investors along the coast / House prices rose in 62% of Spain’s coastal towns during the first quarter of the year, in particular, along the Mediterranean Arc and in the Canary and Balearic Islands, thanks primarily to an increase in demand from investors and foreigners. The forecasts from analysts point to a clear improvement in prices this year in more than half of the areas analysed along the coast. Antigua, in Fuerteventura, recorded the best YoY price rise in Q1 2017, up by 26.1%. (…).

The holiday home market is performing well once again in the majority of Spain’s coastal regions and some economists say that 2017 could be the year of consolidation in the real estate sector. Property prices recorded YoY increases in 84 of the 136 coastal towns analysed, based on data for the first quarter of 2017. In 2016, that figure amounted to 71 and in 2015, just 32, according to the latest report from the appraisal company Tinsa about Coastal Housing.

Political stability, following the failed motion of no-confidence, has combined with economic growth, thanks to the good outlooks from analysts. The forecasts for GDP growth show that the figure is going to exceed 3% this year for the third consecutive year. Moreover, Spain is a strong candidate to become the tourism leader at the global level, with a record forecast in terms of visitor numbers of 82 million this year. The increase in confidence has opened the financing tap, driven by demand for housing, amongst Spanish and overseas investors alike, looking to acquire a second home. (…).

The highest increases were recorded in the Mediterranean Arc – Costa Dorada, south of Alicante, the western coast of Málaga and the Cádiz coast – and the islands, both the Canary and Balearic Islands – in particular, Mallorca and Ibiza. The Atlantic and Cantabrian coasts are recovering more slowly, above all in the area of A Coruña and Asturias, in part due to more significant price decreases following the crisis. Nevertheless, that area has some exceptions, such as Guipúzcoa, where demand for holiday homes mergers with demand for primary residences.

The burst of the real estate bubble meant that this sector was one of the hardest hit by the crisis. In some regions, prices dropped by 60%. (…). It is true that this decrease was less marked in some of the coastal areas, thanks to demand from tourism. Along the Mediterranean Coast, the areas that lag behind the most are the coasts of Almería and Granada, which are still recovering, as well as the south of Valencia and Barcelona, and Gerona, Tarragona and Castellón, to the north of the arc. (…). Excluding those capital cities that have a coastline, Antigua (Fuerteventura) recorded the highest house price increase, with a rise of 26.1% in the first quarter of 2017, compared to the same period in 2016. That was driven by an increase in demand, given that sales there soared by no less than 81% in 2016. The second highest price rise was seen in Gavà (Barcelona), with 17.8%, followed by Mojácar (Almería), with 17.3%. The outlook for prices in 2017 is promising. According to analysts, prices will improve in more than half of the areas analysed (52%). (…).

Original story: Expansión (by Inma Benedito)

Translation: Carmel Drake