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.

Risks

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

Deloitte: Hotel Inv’t Amounted To €2,000M In 2016

28 April 2017 – El Economista

Hotel investment in Spain amounted to €2,000 million in 2016, for the second year in a row, according to a study conducted by Deloitte.

According to the report, this good trend is expected to continue in 2017, supported by positive economic outlooks in the main originating countries: the United Kingdom, France and Germany.

By type of investment, real estate investment vehicles (Socimis, REITs and specialist funds) acquired the most hotel-related assets in 2016, accounting for almost 48% of the total investment volume.

By geography, Madrid was the region that recorded the highest volume of investment, accounting for 43% of the total, followed by the Canary Islands and Cataluña. In addition, 28% of the CEOs consulted by Deloitte expect the level of growth recorded in 2016 to be maintained this year. The outlook is even more encouraging according to 67% of those surveyed, who indicate that they expect 2017 to be even more positive than 2016.

On the other hand, the results of the survey reveal a general view that the leisure and business segments will grow by at least as much as they did in 2016. In this sense, more than 60% of the directors expect to exceed the growth rate in 2016 and think that 2017 will see sustained expansion in terms of executive tourism and the consolidation of leisure tourism.

Original story: El Economista 

Translation: Carmel Drake

CBRE: Madrid Is EMEA’s 3rd Most Attractive City For RE Investors

30 March 2017 – Mis Oficinas

Madrid is the third most attractive city in Europe, the Middle East and Africa (the EMEA region) for real estate investment. At least that is according to the “Global Investors Intentions 2017” report compiled by CBRE, the leading real estate consultancy and services company in the world, based on a survey of 2,000 international investors.

According to the study, London leads the ranking of the most attractive cities for real estate investment, after it was chosen by 17% of investors. It was followed by Berlin (15.8%) and Madrid (8.4%). Amsterdam and Paris complete the top five (…). For the first time in 2017, cities such as Hamburg and Milan did not appear in the top ten, due to growing concerns from investors about (high) asset prices in some of Europe’s most established markets, following years of increases.

“Madrid is a very attractive city for international investors for a variety of reasons. Prices here are still below those of other markets, and in recent years, some very interesting renovation and development projects have been launched. Similarly, rental income is forecast to rise. These factors caused investment in the Spanish capital to exceed €4,000 million in 2016”, said Paloma Relinque, National Director of Capital Markets at CBRE Spain.

Meanwhile, Spain is ranked sixth in the list of the most attractive countries to invest in, whereby maintaining its top-10 position, against competition from all of the countries in Europe, the Middle East and Africa. In this sense, Germany is the market of choice for 22% of those surveyed as an investment market in 2017. It is followed by the United Kingdom (20%), Eastern Europe (10%), Scandinavia (10%) and The Netherlands (9%).

In terms of the sectors that these investors plan to invest in, the office market was mentioned the most, by 34.7% of investors. It was followed by the industrial-logistics sector, chosen by 25.9% of respondents. Nevertheless, one of the most interesting conclusions was the growing appetite for alternative assets, in which 7 out of every 10 real estate investors are now investing. Specifically, real estate debt is the segment that is sparking the most interest amongst investors (31%), followed by leisure and entertainment (27%) – which is the segment that grew by the most in comparison to the previous year – and student halls of residence (25%).

On the other hand, the report described investors’ main concerns for 2017. The most frequently mentioned concern was the risk that interest rates rise more quickly than expected, a fear cited by a quarter of the investors surveyed. It is noteworthy that, despite the numerous elections on the horizon in Europe and their possible implications for the sector, investors place greater importance on the economic climate than on geopolitical matters. The third concern is the fact that prices are forecast to increase and the risk of a possible bubble. (…).

Original story: Mis Oficinas

Translation: Carmel Drake

Madrid: Third Favourite Investment Market In Europe

12 February 2015 – Expansión

PwC Report / The Spanish capital is the third favourite investment market after Berlin and Dublin. The commitments made by George Soros and Dalian Wanda are generating the “pull effect” (in 2015).

The financial investor George Soros, the giant Chinese corporate Dalian Wanda and the new fund manager Tiaa Henderson all have something in common: they have all invested in the Spanish real estate sector in recent months. This activity has not gone unnoticed by other investors, since not only has real estate investment in Spain returned to figures not seen since the boom years (2007), but also the phenomenon is also expected to continue in 2015.

According to the ‘Trends in the European Real Estate Market 2015’ report, prepared by PwC, Madrid is the third favourite destination for investors at the European level, behind Berlin and Dublin. “There is a mixture of 28 cities in this ranking: classic investment destinations such as Berlin and Munich, capitals that are in recovery, such as Athens – the survey was conducted in November before the Greek elections – and Dublin”, explains Rafael Pérez Guerra, the partner responsible for the real estate sector at PwC.

Of the 28 cities studied, only those in Russia have limited prospects for investment growth, even though 61% of respondents believe that the good assets (known as “the core” in the sector) are overvalued in virtually all of the European markets.

This boom has led many investors to seek out new markets. “Another important area of interest are the secondary cities, such as Birmingham, which is ranked in sixth place, above London and Munich. Investors have started to take on more risk because profitability in the large markets is scarce; as a result they are exploring secondary sites”, he adds.

Spain

The change in the Spanish real estate sector is reflected in the rise (up the ranking) of its main markets as investment destinations: Madrid has risen from 19th place to third and Barcelona from 22nd to 13th, according to PwC’s report.

“There is a very high level of interest and activity in Spain. It is not that the market is not over-heating, but rather that the dynamics of the sector are changing, with an imbalance between a scarcity of good deals in prime areas and significant demand from opportunists who remain in the market and more stable investors who are arriving”, says Enrique Used, the partner responsible for transactions in the real estate sector at PwC.

This commitment to the Spanish market will continue in 2015, according to the survey respondents, and will not be limited to the large markets. “International capital has moved towards Spain, en masse. Prices have risen considerably in Madrid, which suggests that the investors that are looking for the highest returns, should set their sights on the secondary markets in Spain during 2015 to obtain higher returns.

Although the 500 people surveyed by PwC see a clear recovery in investment in Spain, they still believe that the market for the construction of new homes should improve; Madrid and Barcelona are ranked only 14th and 23rd, respectively, although that represents an improvement with respect to 2013 when they were ranked 21st and 25th.

Original story: Expansión (by R. Ruiz)

Translation: Carmel Drake

Bank Of Spain: Demand For Home Loans Increases Again

28 January 2015 – Expansión

The bank loan survey carried out by the Bank of Spain and the main Spanish financial institutions shows that “requests from families for home loans increased in January, after remaining stable during the previous three months in Spain and continued their progress in the Eurozone”. The report explains that “the main drivers of this development was an improvement in the prospects of the housing marketing and an increase in consumer confidence”.

Just yesterday, INE reported that the mortgage market grew in November for the sixth consecutive month, this time by 14.2% with respect to November 2013. Specifically, 15,900 new home loans were signed in November, 10.1% fewer than the 17,687 taken out in October. The average mortgage amounted to €104,817 in November, compared with €99,866 in the previous month, representing an increase of 5%.

Management of fotocasa.es, the real estate portal, interviewed by Efe, considers that these data confirm that “the desired reactivation of mortgage financing” was achieved in 2014, as a result of “increased activity in the economy, better prospects for the real estate market and the need for banks to do business following the liquidity crisis”.

In this sense, the Bank of Spain’s survey explains that the criteria for approving new loans were “somewhat less restrictive” for home loans than for unsecured loans.

In terms of corporate loans “the growth in requests for loans by SMEs was higher than those for large companies in Spain”.

Original story: Expansión (by Y. González)

Translation: Carmel Drake