30 October 2017 – El Economista
Demand for industrial and logistics land is growing fast in the province of Valencia. Sale and purchase operations involving this type of land have already exceeded the total volume of space (in square metres) sold during 2016 as a whole, by 30% at least, when operations spanning 585,000 m2 of space were signed – 130% more than during the previous year.
Information from specialist consultants and other data provided by public managers indicates that more than 750,000 m2 of land has been acquired, with a significant percentage of the operations being closed in Ribaroja, Cheste and Sagunto –almost half of the square metres purchased are located in Parc Sagunt, which has experienced a boom since the arrival, in December, of Mercadona, which plans to construct its largest logistics platform there (…).
This increase in demand comes in response to a combination of factors, including: the consolidation of the economic recovery, supported both by internal demand and the export of products and services, which has boosted projects to expand production capacity and storage by industrial groups; the positive outlook for the next few years; improvements in terms of the access to and conditions of financing; projects to improve the communications network – above all, the railways; the growing interest from investors – corporate and institutional, in particular – looking for options to generate higher returns than those found in the financial and securities markets; and the growing demand for modern, high-quality, large assets, in good locations, which have been underserved in recent years due to the total stoppage of new development projects in this field, as a result of the economic crisis (…).
Aguirre Newman adds another element that has benefitted the Valencian market: “The shortage of supply in the main markets in Spain – Madrid and Barcelona – has boosted interest in secondary markets, in particular, in Zaragoza, Valencia and Sevilla”. And this trend could be reinforced in the coming months due to the instability in Cataluña, which is leading to the departure of companies and the suspension of investments.
This confluence of factors has contributed to an increase in the presence of investment funds, Socimis and specialist property developers as the main players participating in sale and purchase operations, above all in the last year and a half (…).
In terms of rental prices, in the prime areas of Valencia, maximums amount to €4.25/m2/month in the Centre Axis of Ribaroja, whilst in the Southern Axis (…), rents have stabilised at €4/m2/month.
In terms of the profitability of logistics rental spaces, whilst in Madrid and Barcelona, yields amount to between 5% and 6%, in the areas with the highest demand in the Community of Madrid, they range between 7% and 9%, according to the consultants (…).
Meanwhile, the Port Authority of Valencia (APV) expects that the Logistics Activity Area (ZAL) will become operational during the first half of 2018, after two decades of delays (…).
Original story: El Economista (by Olivia Fontanillo)
Translation: Carmel Drake