Tag: Socimis

Investors On The Hunt For Prime RE Assets

20 April 2015 – Expansión

Opportunities / The Spanish real estate sector has aroused interest from all types of purchasers, from those that are more opportunistic in nature to those that are seeking lower risk. Offices, shops and shopping centres are the most sought-after assets, but hotels and logistics centres offer the best returns.

The volume of investment has increased from just over €3,000 million to more than €8,500 million in only 12 months. That has been the evolution recorded by the non-residential real estate segment, which reflects the highest level of interest from all kinds of investors in Spain. Thus, the Spanish market has become the second most attractive country for investment in Europe, according to the consultancy CBRE.

But, what are these investors looking for in Spain? Based on the nature of the deals closed last year, offices and commercial assets (both shopping centres and high street stores) are the most sought after. “The transactions that spark the most interest have a value of between €40 million and €50 million, rely on financing for 50-60% (of the price) and generate an initial return of between 5% and 7%. Investors are looking for buildings with: occupancy rates of more than 70%; solvent tenants; and (lease) contracts lasting for around 6 years”, explain sources at JLL, based on data collected in a survey prepared together with the Iese Business School from more than 100 investors.

Excess demand for buildings, and for offices and shopping centres in particular, has led to “very competitive processes for star assets, i.e. those that are best placed in terms of location or that have high rentals, as well as good buildings that require management to improve their profitability”, explain sources at Catella. “Socimis and US funds are very active, along with institutional funds. All of them are creating strong investor pressure”, they add.

The fierce competition has meant that offices and commercial assets no longer offer such high returns, and so many investors have started to invest in other kinds of assets, such as logistics and industrial centres and hotels. Thus, whilst deals involving offices in prime locations offer a return of 5.5%, well-located industrial assets generate a return of 8.25% and logistics centres in secondary areas produce returns of up to 9.5%, explain sources at Deloitte Real Estate.

In the hotel segment, the experts predict that the volume of investment in 2015 will exceed that recorded last year (€1,081 million) thanks to deals involving distressed assets and the activity of debt portfolios, given the shortage of attractive assets.

Renovation

Another possibility being considered by investors looking to enter the Spanish market and make a good return is the recovery of out-of-date properties or those without good lease contracts, through their renovation. “On the one hand, Socimis are looking to purchase offices, logistics assets and shopping centres that guarantee a return of between 6% and 7.5%. On the other hand, we have the real estate funds owned by private equity firms, which are looking for riskers assets that offer higher returns, such as properties that require renovation or land that needs developing. The expected returns in those cases can exceed 15%”, explain sources at Deloitte RE.

“Investors are becoming increasingly sophisticated and demanding. As has happened in other European countries, the most efficient buildings are going to be the key and, in the case of the financial district in Madrid, they have the lowest availability rates in Europe for that type of asset, which opens an important niche, both for investment as well as for the renovation of existing properties”, say source at Knight Frank.

Original story: Expansión (by R. Ruiz and Y. Blanco)

Translation: Carmel Drake

Who Are The New Property Owners?

20 April 2015 – Expansión

Plans / International funds and Socimis are the main players in the sector

Apollo, Blackstone, Cerberus, HIG, Hispania, Intu, Lone Star, Merlin and Oaktree have gone from being virtually unknown names to being the key players in the Spanish property market (in a matter of months).

Over the last year and a half, large international funds have been investing hundreds of millions of euros in the purchase of property in Spain, both directly as well as through listed real estate investment companies (Socimis).

Värde, Apollo and Lone Star all burst into the market by purchasing real estate platforms from financial institutions. The latter has said that it wants to become the largest land developer in Spain and to that end, it is considering purchasing not only portfolios of land but also small and medium-sized (land) developers. Lone Star has already purchased the real estate arm Neinor from Kutxabank for €930 million, as well as Eurohypo’s loans in Spain for a further €3,500 million.

HIG and Castlelake are looking to buy land in Spain too.

Another investor that is backing Spain with more strength than ever is Blackstone. The largest fund manager in the world has purchased 1,860 homes for rent, as well as a group of office buildings, located in Madrid and Barcelona. One of the players that is most interested in the office market is the Spanish fund Meridia Capital, led by the former Sareb (director) Juan Barba; it has purchased a portfolio of office buildings from General Electric. It is competing against IBA Capital – the French manager has created a Socimi, which has not yet been listed, with headquarters and commercial buildings.

Along with these offices, the other assets that are sparking the most interest amongst investors are shopping centres. Green Oak has already invested €160 million together with Baupost on the acquisition of 6 properties from Vastned. The British group Intu wants to become the leading player in this segment in Spain and to that end, it paid €451 million for Puerto Venecia. Oaktree spent €100 million on Gran Vía de Vigo.

Other important players in this new era for the real estate sector are Socimis. Axia RE, Hispania, Lar España and Merlin have invested almost €3,000 million in assets, which include hotels, offices, logistics centres and warehouses. This last type of asset is attracting considerable interest. The fund Colony has just formed a partnership with the Spanish company Neinver to purchase 16 logistics warehouses.

Finally, in the hotel segment, Cerberus and Orion have purchased Sotogrande, the real estate subsidiary of NH for €225 million.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Large Funds & Socimis Invest €2,500M In RE In Q1 2015

20 April 2015 – Expansión

Q1 2015 / Major international investors and Socimis purchased more non-residential property in Spain during the first quarter of 2015 than during the whole of 2012.

The investor frenzy that began in the Spanish real estate sector at the end of 2013 and intensified last year is on track to smash all historic records (this year), including the peak levels of the boom years. Between January and March, large international funds, companies from Spain and the rest of Europe and new listed real estate real estate investment companies (Socimis) made purchases worth €2,463 million, according to the consultancy firm C&W, i.e. three times the volume recorded during the same period last year.

This figure exceeds the total volume of investment made during 2012 in its entirety, when the global crisis really hit the Spanish real estate sector and only €2,087 million was invested in the market, according to Deloitte Real Estate. Having been boosted by domestic and international purchasers who spent more than €8,500 million in 2014, the start of this year reflects a “unique” time in the sector for various reasons, according to market experts.

On the one hand, the Spanish economy is recovering well, which is resulting in higher consumption and more recruitment, which is in turn influencing commercial and office buildings.

On the other hand, the decrease in prices, of up to 40% in the case of assets, has meant that many opportunities exist in terms of price in the Spanish market, in contrast to what is happening in other European countries. “The low profitability of fixed income assets has turned real estate into an important sector in terms of investment portfolios. Furthermore, prices are stabilising, access to credit is opening up and the economy is growing”, say sources at Aguirre Newman. The confluence of these elements has led all of the players in the real estate sector to show their support Spain: from the most opportunistic funds seeking properties with significant discounts to more institutional investors, such as sovereign and pension funds, and including Spanish and foreign real estate companies.

Battle for assets

All of this has led to a real war for the best assets (known in real estate jargon as trophy buildings), which means that this year looks set to be a record year in terms of purchases. “We expect to see great figures in 2015, approaching €7,000 million in terms of direct non-residential investment”, explain sources at JLL España.

“If the level of interest in Spanish real estate assets from major global investors continues for the rest of the year, then we could see historic record figures in 2015, even higher than the peak recorded in 2007, when transactions with a total value exceeding €12,000 million were closed”, add C&W.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

BBVA Seeks Buyers For 14 Hotels

13 April 2015 – El Confidencial

The hotels are located all over Spain – in Lloret de Mar, Jaén, Benidorm – but according to sources, some of them have been closed.

This is not a transaction involving debt with hotel collateral, but rather the sale of the assets themselves, of their flesh and bones, of their cement and brick. BBVA has hung a “For Sale” sign over fourteen hotels that have been sitting on its balance sheet since various non-performing loans were foreclosed, according to a number of sources. Aguirre Newman has received the sales mandate, but neither the consulting firm or the bank have wanted to make any declarations in this regard. The transaction has been dubbed Project Othello.

The hotels in question are located all over the Spanish peninsular – in Lloret de Mar, Jaén, Benidorm – but according to various sources, some of them are currently closed, with the consequent saving in terms of management and operating costs – the payment of salaries, for example.

BBVA’s decision to put these assets up for sale comes at a time when investors’ appetite for Spanish assets is growing rapidly, thanks to confidence in the growth of the Spanish economy, the record number of foreign visitors to our country, as well as legal certainty.

There is activity in the real estate market, and specifically, within the hotel segment. In 2014, transactions with a value of €1,080 million were closed, representing an increase of 37% over 2013, and twice the figure recorded in 2012, according to data from the consulting firm Irea. It represented the third highest investment volume in the last twenty years, only behind €1,095 million in 2007 and €1,780 million in 2006, an exceptional period for the sector.

Nevertheless, hotel experts consider that it is unlikely that BBVA will find a single buyer for all of these hotels; instead they think that the most likely option is that the entity will end up selling the assets individually to private investors.

BBVA’s is not the only hotel transaction currently on the market. In addition to the sale of these assets, other entities are also negotiating the sale of various debt portfolios that are secured by hotels as collateral. Such is the case of Bankia’s Project Amazona, worth €400 million, secured by around fifty hotels and Project Gaudí, a portfolio of real estate loans worth €750 million, held by the German “bad bank”, which at the time was used to buy the Hotel Arts in Barcelona. Likewise, the experts do not rule out the creation of hotel Socimis over the next few months, following in the footsteps of Hispania and Barceló.

Original story: El Confidencial (by Elena Sanz)

Translation: Carmel Drake

Socimis Invest €420M+ In Asset Purchases In Q1 2015

6 April 2015 – El Economista

The main listed real estate investment companies (‘sociedades cotizadas de inversión inmobiliaria’ or Socimis) have continued to make purchases in 2015. During the (first three) months (of the year), they have spent more than €420 million on the acquisition of office buildings, residential complexes, logistics warehouses and hotels.

Merlin Properties, which debuted on the stock exchange in June last year, with a valuation of €1,250 million, has invested the largest amount during the first three months of the year (€146.3 million).

Since the start of the year, the company has acquired the office building located at number 8 World Trade Center Almeda Park (WTCAP) in Cornella de Llobregat (Barcelona) for €36.5 million and has spent €38.1 million on another office building located on Calle Alcalá 38-40 (Madrid), which is entirely leased to the Ministry of the Interior.

Similarly, it has acquired a logistics warehouse measuring 16,242 m2 in Getafe (Madrid) for €12.75 million, which is leased to Transportes Souto; another measuring 72,717 m2 in Vitoria for €28.58 million, leased to Norbert Dentressangle; and has spent a further €19.8 million on another warehouse located in Coslada (Madrid), measuring 28,490 square metres, which is leased to Azkar.

Following these acquisitions, Merlin’s property portfolio exceeds 717,000 m2 and generates gross annual rental income of €132.2 million.

Meanwhile, the Socimi owned by the Lar Group purchased a plot of land jointly with Pimco measuring 26,203 m2, located on Calle Juan Bravo, 3 (Madrid), where the Juan Bravo Plaza project was being carried out, led by the property developer Eurosazor, owned by Rafael Ortiz, in which Fernando Fernández-Tapias and Paloma Mateo also hold shares.

Lar España will now take over the management of this new real estate project with the objective of constructing a first class residential building in one of the “prime” (real estate) areas of the city, close to the Golden Mile. This transaction takes the Socimi’s total investment to €458.7 million in 15 deals since its IPO.

Meanwhile, Hispania, – the listed investment company controlled by Azora and in which the multimillionaires George Soros and John Paulson hold shares – has acquired a residential complex measuring 39,000 m2 in Sanchinarro (Madrid), comprising 284 homes and 311 garages, for €61.15 million.

It has also purchased an office building located on C/Príncipe de Vergara, 108 (Madrid) measuring 7,324 m2 for €25 million, as well as the three-star Hesperia Ramblas Hotel (Barcelona) for €17.5 million and the four-star Vincci Málaga Hotel for €10.4 million.

Finally, AxiaRE has acquired two office buildings in Madrid, one located in Campo de las Naciones and the other on Calle Juan Ignacio Luca de Tena, for €40.5 million in total.

Since its IPO, the company has closed 9 investment transactions valued at €464 million, through which it has acquired 18 properties, which have a combined rentable surface area of more than 402,000 m2.

Original story: El Economista

Translation: Carmel Drake

Overseas Funds On The Hunt For Holiday Hotels

26 March 2015 – Expansión

Socimis (‘socidedades cotizadas de inversión inmobiliaria’ or listed real estate investment trusts) and the appetite of overseas investment funds are driving the professionalization of the hotel sector in Spain, to separate the ownership of properties from the management of establishments, in line with the Anglo-Saxon model.

That is one of the conclusions to come out of a conference held in Madrid yesterday about the evolution of the hotel sector over the last decade. The conference was organised by Magma Hospitality Consulting and the Intercontinental Hotels Group (IHG), the largest hotel group in the world by size.

Liquidity

“Socimis are an essential tool that Spain has needed for a long time, to provide liquidity to a portfolio of assets, respond to generational renewal and professionalize management”, said Luis Migual Martín, Investment Director at Azora.

This company launched a Socimi (Hispania), which formed an alliance with Barceló at the start of the year to create the first listed investment vehicle specialising in the hotel sector (Bay Hotels), which has assets of more than €420 million.

For his part, Alejandro Hernández Puértolas, CEO at HI Partners, the hotel fund driven by Solvia – Banco Sabadell’s real estate arm – added that “the Socimis could bring together assets in Spain amounting to €8,000 million”. In the USA, the REITS – equivalent to Socimis – that specialise in the hotel sector have (assets under management amounting) to more than €70,000 million.

Nevertheless, there is still room for improvement. For Martín “there needs to be a change to the current legislation to reflect the management model, which now falls outside of (the scope of) the Socimis”. Arturo Díaz, CEO of Business Development at Renta Corporación, added that “other instruments will be created besides the Socimis”.

In the case of international funds, the focus has shifted from the city to the beach. “Institutional investors are starting to get involved into the vacation segment. The main difficulty is obtaining a portfolio of assets, but the appetite is there”, said Díaz, who called for restraint when it comes to changing the use of office buildings and homes into hotels.

Original story: Expansión (by Y. Blanco)

Translation: Carmel Drake

UBS Finalises Its Purchase Of The Zielo Shopping Centre

20 March 2015 – Expansión

The Swiss bank’s real estate fund is offering €73 million for the Madrilenian shopping centre, exceeding the expectations of its current owner, Hines, which has invested more than €100 million in its construction.

Another shopping centre is expected to change hands soon. After the French company Klépierre closed its purchase of the Plenilunio shopping centre in Madrid this week, another Madrilenian property will soon have a new owner.

The property in question is the Zielo shopping centre, located in the town of Pozuelo de Alarcón, in Madrid. The building was designed by the real estate company Hines, which took out a loan of €50 million to construct the property. Conceived at the height of the boom (it was opened in October 2009), Hines invested more than €100 million in its development.

The centre, designed by the architect Alberto Martín Caballero, has a surface area of 50,000 square metres, of which 15,537 m2 is dedicated to retail over three floors. It also has more than a thousand parking spaces, the majority of which are indoors.

Five years later, Hines put the “for sale” sign up on its Madrilenian shopping centre in January. The initial asking price was set at €65 million. The Houston-based real estate company decided to sell the property through a restricted (tender) process rather than open it up to all of the interested investors in the Spanish market. Thus, its advisors reached out to the large Spanish Socimis (Merlin Properties, Axia Real Estate and Lar España), as well as the more institutional investment funds such as Deka Inmobilien and the (fund) manager Tiaa Henderson. In the end, the real estate fund owned by the Swiss bank UBS made the best offer and is now negotiating the finer details of the transaction in an exclusive process with Hines.

According to sources close to the process, UBS is offering €73 million. A price that means that the yield on the transaction amounts to less than 5%, a very low figure compared with the figure of 10% that was achieved on the first deals involving the sale and purchase of shopping centres following the burst of the bubble, in 2013.

Zielo Shopping is not the only commercial property that is currently on the market in Spain. According to Deloitte Real Estate, around 80 shopping centres will come onto the market over the next 12 months. Some transactions, such as the purchase of Puerto Venecia in Zaragoza and Plenilunio in Madrid have already been closed. In total, €3,500 million could change hands in this market alone.

Possible buyers include the British real estate company Intu Properties, which is finalising a call option on a real estate project in Málaga, as part of its €2,500 million investment program, and the fund manager CBRE Global Investors, which plans to invest €600 million in shopping centres and retail outlets in the Spanish market.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake

CaixaBank Will Be S&P’s New Neighbour On The Castellana

9 March 2015 – Expansión

Lease Agreement / The bank is going to rent 2,800 square metres of office space in Banesto’s former headquarters. It will share the premises with the credit ratings agency, S&P, amongst others.

After a record year for investment in offices (Socimis and large international funds spent more than €1,000 million on acquisitions in 2014), the buildings in Madrid are also beginning to observe an increase in their occupancy rates, especially those located on the city’s main thoroughfare.

That is the case of the office building located on Paseo de la Castellana, 7. The former headquarters of Banesto will soon house another well known tenant. CaixaBank had agreed to rent out 2,800 square metres in the building. The bank will pay around €70,000 per month for the space, according to real estate sources.

In the last quarter of 2014, rents in the prime office areas of Madrid amounted to around €25.50 per square metre per month, the highest figure in the last three years, according to JLL.

Tenants

CaixaBank will join companies such as the ratings agency Standard & Poor’s (S&P), the Swiss bank Julius Baer, the law firm White & Case and the firms Munich Real Estate and FTI Consulting, which already have offices in the property. Until the arrival of the entity, chaired by Isidro Fainé, the most recent addition (to the property) was the Japanese business group Mitsui, which leases 1,500 square metres over two floors.

Castellana, 7 is owned by the Aragonese group Samca, which also owns the (property) developer Ebrosa. The building offers 12,869 square metres of office space in total and for years it housed the headquarters of Banesto. In 1997, the owner of Samca, the businessman Ángel Luengo, paid the entity 8,000 million pesetas (around €48 million), after failing to reach a preliminary agreement with Telefónica.

In 2011, the building was refurbished by the team at Aguirre Newman Arquitectura. Following the deal with CaixaBank, the building will have less than 5,000 square metres unoccupied.

Transactions

The rental of 2,800 square metres of office space on the Paseo de la Castellana by CaixaBank comes just two weeks after the first major office lease agreement of 2015 was signed in Madrid.

The professional services firm KPMG has reached an agreement with Mutua Madrileña to move its corporate headquarters in Madrid to the Torre de Cristal skyscraper, in the Cuatro Torres business district. KPMG has leased 20,000 square metres in the tower.

In 2014, office space occupying a surface area of 365,000 square metres (of the total 15.1 million sqm) was leased in Madrid. The most significant transactions included the move by Havas to the building on Eloy Gonzalo, 10, which had been acquired by the real estate group GMP a month before. The multi-media group will occupy the office space, which covers around 12,000 square metres. In Barcelona, the law firm Cuatrecasas signed an agreement to lease 19,900 square metres at the end of the year.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Student Halls In Spain: A Wise Alternative Investment?

17 February 2015 – Idealista

When we talk about real estate investment in Spain, we tend to mean the purchase of offices, hotels and shopping centres. Nevertheless, there is another type of property that may also generate high returns: student halls of residences. However, unlike in other European countries, this accommodation does not totally convince investors looking for assets in Spain. The lack of companies that know how to optimise them, and the shortage of the ideal product are some of the reasons why no transactions are being closed in this segment, despite considerable interest.

Spain had around 1.41 million students enrolled in universities during the academic year 2013-2014, according to the Ministry for Education, Culture and Sport. That is, a little over 3% of the Spanish population were university students. This percentage places Spain ahead of other countries such as Germany and France. The majority of these students (77%) studied courses in their home province, but 20% moved to another province to study and around 3% were from overseas.

Delving more deeply into their lifestyle: approximately 64% of university students live at home with their parents or other family members. At the other extreme, those who live away from home only have two options: rent (either in a shared house or on their own) or live in halls of residence. Specifically, only 2.8% choose to stay there.

In the opinion of the experts consulted, these figures are justified by the “very low” availability of public university halls. “Although there are significant cultural differences, certain aspects indicate that the market for university halls of residence in Spain will have to converge with that of the rest of Europe”, says a report published by JLL.

The consultancy firm is convinced by its analysis that the implementation of the Bologna education reforms will promote cross-border studying between European universities, “which tend to have much high percentages of students living in halls”. In Spain, it is normal for students to opt for this type of accommodation during the first and second years only.

“The flow of students travelling to study in other countries will increase over the coming years and not only in relation to Erasmus placements”, says Patricio Palomar, Director of Office Advisory and Alternative Investment at CBRE. In his opinion, issues such as the language (Spanish), the lifestyle and the affordable prices in comparison with neighbouring countries, are just a few of the attractions that draw many foreign students to choose Spain as their destination.

The main drawbacks

Unnim, the entity created from the merger of Cajas de Manlleu, Sabadell and Terrassa, is active in this market. The bank, which was acquired by BBVA in 2011, inherited this line of business from Caixa Terrassa. The former caja constructed its first hall of residence on the Avenida Parallel, 101, in the Poble Sec neighbourhood of Barcelona back in 2007.

According to the latest data available for Unnim, this business line generated a return of 7%. Sources in the sector explain that the net return on these types of assets can reach 10%, well above the rates offered by offices, hotels and shopping centres. In countries such as the UK and USA, this business generates returns of between 11% and 15%.

Juan Manuel Ortega, Director of Investment Offices at JLL, recognises that British firms are over-valuing these types of assets in Spain. These investors are looking for halls of residences that are larger than 5,000 m2 and that have between 60 and 150 rooms. Palomar also acknowledges this trend “the same funds that operate in the UK for example are looking (for opportunities) in Spain. The problem is that the same product is not available in other countries”.

Palomar maintains that student halls in Spain are obsolete and that many of them are stuck in the 1960s. That does not happen in cities such as Amsterdam where student accommodation is modern, hotel-like and less than 10 years old.

Another one of the pitfalls that affects this business is the ownership of these spaces. Most belong to the public universities, many of which have serious financial problems and cannot afford to finance the investment needed to optimise the assets. At the same time, they cannot sell the land and allow private companies to enter the sector.

This has a very direct effect on competition; it is low, which does not lead to an improvement in the facilities either. Similarly, experts recognise that the administration of these complexes is not simple, they require professional management.

Nevertheless, Palomar states that new student halls of residence are appearing in the outskirts of cities and near private business schools. “I think Spain should focus on other kinds of tourism, beyond the holiday market; educational and health tourism (have significant potential)”.

A trickle of transactions

The lethargy in this market is such that transactions are very scarce. The last known deal involved the purchase of the Galdós halls of residence in Madrid in 2012. The British firm, Knightsbridge Student Housing paid €20 million for the property, it was the first acquisition made by the company outside of the UK. Knightsbridge Student Housing was created in 2010 with the backing of Oaktree Capital Management.

Another of the most talked about transactions involved Lazora (Concha Osácar) when it acquired the Resa Group in 2011. Resa was created in 1994 and currently manages more than 8,000 beds in 32 halls of residence. The construction company Acciona also has give halls of residence (in Albacete, Cádiz, Castellón, Lleida and Murcia), which it has tried to sell in the past.

Further proof that this branch of real estate activity in Spain is still light years away from what is happening in other countries, is that Socimis dedicated to student accommodation already exist overseas. In 2013, GCP Student Living constituted the first REIT (Real Estate Investment Trust) in the UK.

Original story: Idealista (by Estefania Fonseca)

Carlton Group: Spain’s Real Estate Sector Records 2nd Best Year In A Decade

16 February 2015 – Property Funds World

Spain’s commercial real estate investment sector rose to approximately EUR9 billion in 2014, exceeding the most optimistic forecasts,  according to a new report by The Carlton Group.

2014 was the second best year within the last decade in terms of volume for Spanish commercial real estate investment, (surpassed only by 2007 when the value of each asset was significantly higher), the report said.

“Spain has once again become a relevant destination for real estate investors and the positive trend is expected to continue over the next few years,” says Javier Beltran, Managing Director of Carlton Iberia (Spain and Portugal) and head of Carlton’s Madrid office.

The report cites the “unparalleled arrival” of a very large number of international institutional and “off radar” investors from Asia, Middle East, Latin America, North America and Europe, along with the new Socimi, the Spanish REITs, that have contributed to the increased volume and value of commercial real estate transactions in Spain.

In 2014, the most desired Spanish assets for investors were prime office buildings and shopping centers, (two of the largest shopping centers in Spain were transacted during 2014), along with hotel, logistic and car park sectors, the Carlton report said.

Many investors have also started to buy “well located land development sites”  in Madrid, Barcelona and Spain’s Southern coast. This has contributed to an increase in construction activity that is also expected to rise in coming years.

The report points to the increased number of international investors, the general improvement of the Spanish economy, along with the renewed interest in Spanish banks’ lending capacity as contributing factors to a revaluation of real estate assets that is expected to continue during the next few years.

It also attributes a very robust hospitality investment market to the record number of international visitors coming to Barcelona, Balearic and Canary Islands, Madrid, Marbella, Valencia and Alicante over the last two years.

Prices in the Spanish residential market are stabilising and have shown slight increases in some areas of main cities, with the trend expected to increase price and activity, the Carlton report said.

The report concludes that Spanish real estate markets are “becoming more professional and international and all that is very good news,” says Carlton’s Beltran.

Original story: Property Funds World

Edited by: Carmel Drake