Laborde Marcet: RE Inv’t Amounted To €6,230M In H1 2017

3 August 2017 – El Mundo

Investment in real estate amounted to €6,230 million during the first half of 2017, in terms of non-residential property, according to data published by the real estate and wealth manager Laborde Marcet.

By sector, retail accounted for 42% of the total (€2,619 million), ahead of the office sector, which represented 25.5% (€1,588 million). Meanwhile, the hotel sector accounted for 23% (€1,433 million) and logistics assets the remaining 9.5% (€590 million).

The founding partner of Laborde Marcet, Miquel Laborde, said that the real estate sector is reaching “maximum levels” in terms of the final prices of operations given that the “the difference between demand and supply causes prices to rise, although that pushes down the yield on those assets”.

During the second quarter of 2017, the figures show a QoQ decrease. In the period from April to June 2017, €2,710 million was invested in non-residential real estate operations, down by 23% compared to the first quarter of 2017, when €3,520 million was invested.

By sector, during the second quarter of 2017, retail accounted for 41.5% of the total investment (€1,124 million), followed by the office sector, which represented 26.6% (€720 million). Meanwhile, the hotel sector accounted for 24% of the total (€650 million) and the logistics sector the remaining 7.9% (€216 million). All of the sectors saw their investment figures decrease with respect to the first quarter 2017, with the exception of offices, which increased their market share by 1.9 percentage points.

If this trend continues during the second half of 2017, the tertiary real estate sector would see total investment in real estate for the year reach almost €13,000 million, which would represent an increase of 16.75% with respect to the data recorded in 2016, when investment for the year amounted to €11,134 million.

Original story: El Mundo

Translation: Carmel Drake

BBVA Research: RE Sector Makes “Good Start” To 2017

6 June 2017 – El Mundo

BBVA Research has given the real estate sector a “good mark” for the first quarter of 2017, following a “positive” trend in terms of sales, which accelerated the growth in prices. However, the organisation indicated that the sector showed signs of a “significant heterogeneity” by region once again, and that there was a loss of “momentum” in terms of new loans in April due to a decrease in refinancings.

That was according to the latest Real Estate Observatory for Spain report, prepared by BBVA Research, the financial entity’s research service, which acknowledges a “positive trend” in terms of house sales, given that, based on data from the Centre for Statistical Information from Notaries (CIEN), 48,695 homes were sold during the month of March.

This means, after correcting the series for seasonal variations and calendar effects (CVEC), there was a stagnation in sales with respect to the previous month, but an increase in sales (19.5%) in YoY terms. In this way, sales during the 3 months to March rose by 16.2% YoY, above the average for 2016, in large part thanks to the fact that the main determinants of demand “continued their positive tone during the first quarter of the year”, said BBVA Research.

In this sense, it highlighted that employment is continuing to evolve positively, given that the number of people registered for Social Security in April and May grew at an average MoM rate of 0.4%, above the average monthly rate recorded during the first quarter (+0.3%) (…).

Fewer new loans

Nevertheless, the report warns that new loan operations to buy a home stagnated in April, due to a sharp decline in the number of refinancings. According to data from the Bank of Spain, during the fourth month of 2017, new loans to buy a home decreased by 41.6% YoY, a reduction that actually reflects the high volume of refinancings that took place in April 2016. As such, if we exclude refinancings, the number of new loan operations remained stable with respect to the same month last year (-0.1%).

BBVA Research is “certain” that the stagnation is related to the fact that Easter fell in April this year. In fact, the sum of new operations in March and April rose by 13.1% YoY. With this, during the first four months of the year, new loans to buy a home rose by 10.6%, with respect to the same period a year earlier. Excluding refinancings, which decreased by 86% during the same period, the increase in new mortgage loans amounted to 16.5%. (…).

Heterogeneity in terms of price rises

Meanwhile, the growth in house prices accelerated during the first quarter of 2017. According to the Ministry of Development, the average house price amounted to €1,525.80/m2 during the first quarter, up by 0.7% in QoQ terms, after correcting for seasonality (CVEC), in other words, 0.2 percentage points higher than during the fourth quarter of 2016. Moreover, the YoY evolution saw an acceleration in the growth rate to 2.2% during Q1, up by 0.7 percentage points compared to the previous quarter.

In any case, BBVA Research indicates that the evolution of house prices was still “significantly heterogeneous by region” between January and March. After correcting the series for seasonality, price rises were reported in nine autonomous regions (Andalucía, Canarias, Cantabria, Cataluña, Comunidad Valenciana, Madrid, Murcia, Navarra and País Vasco), with particularly noteworthy rises in Cantabria, Navarra and País Vasco – the three regions have shown less activity in previous quarters.

By contrast, average house prices fell during the first quarter with respect to the previous quarter in all of the other autonomous regions, led by Aragón and La Rioja, which saw QoQ decreases of around -2%. (…)….whilst the price increases being recorded in the Balearic Islands, Madrid and Cataluña exceeded 10% in all three cases.

Housing permits on the rise again

Finally, the first quarter of 2017 closed with a renewed growth in construction activity. (…). The number of housing permits rose by 18.7% during Q1 2017. In this way, almost 20,000 new homes were approved during the first three months, up by 3,141 compared to the same quarter in 2016. (…) .

Original story: El Mundo

Translation: Carmel Drake

Fotocasa: Rental Home Prices Rose By 9.5% YoY In Q1

28 April 2017 – El Mundo

The average price of rental housing in Spain rose by 9.5% YoY and by 5.9% QoQ during the first quarter of 2017, according to the Real Estate Index compiled by the online portal Fotocasa. In this way, the average rental home cost per square metre amounted to €7.93/m2 as at March 2017.

This quarterly increase in rental home prices was in line with the trend observed in 2016. In the absence of official statistics, the index from Fotocasa corroborates the anecdotal evidence being seen on the street.

“Rental prices are rising significantly because demand is much higher than supply, above all, in those areas with the largest volumes of economic, tourist and demographic activity. Month after month, in regions such as Cataluña, Madrid and the Balearic Islands, we are seeing how the distance between the peak prices recorded in 2007 and 2008 is decreasing, and in some cities in those areas, the price per square metre has now reached the pre-crisis maximum, such as in the case of Barcelona”, explained Beatriz Toribio, Head of Research at Fotocasa.

In fact, the increase recorded during the first quarter of 2017 is the most markedsince Q1 2007, according to the Real Estate Index, when prices rose by 4.9%. Since then, the quarterly rental price has done nothing but decrease, with some exceptions in one-off quarters in 2011 and 2014. In 2015, the quarterly rental price began to recover, with increases of 2.8% and 1.5% in the first and second quarters, respectively, trends that continued in 2016, with the exception of Q3 2016, when prices fell by 2%.

At the inter-annual level, rental prices rose by 9.5%, the most marked increase in the history of the Real Estate Index, which has been compiled since January 2006. Moreover, during Q1 2017, rental prices rose in 14 autonomous regions at the quarterly level and in every region at the annual level. (…).

Evolution by autonomous region and province

Since reaching their maximum price in May 2007 (of €10.12/m2), rental home prices have recorded a cumulative decrease of -21.7%. In this regard, only three autonomous regions have recorded cumulative decreases of more than 30% since they peaked five years ago. In this way, Aragón is the autonomous region where rental prices have fallen by the most (-38.7%), followed by Castilla-La Mancha (-34.1%) and Cantabria (-31.3%).

During the first quarter of 2017, rental price increases were recorded in 14 autonomous regions, with the rises ranging from 5.4% in Cataluña to 0.4% in Castilla y León. Regarding the evolution by province, rental price increases were recorded in 36 provinces with respect to December 2016, with the rises ranging from 8.6% in Guadalajara to 0.2% in Alicante. By contrast, rental prices decreased in 14 provinces with the reductions ranging from -0.2% in Toledo to -3.6% in Ávila. (…).

By municipality, the town with the highest rental price was Barcelona, at €15.15/m2/month, followed by Eivissa (€14.60/m2/month), Sant Cugat del Vallès (€13.41/m2/month), Sitges (€12.85 /m2/month) and Castelldefels (€12.85/m2/month).

Original story: El Mundo

Translation: Carmel Drake

Mitula: Rental Prices Soar In Spain’s Large Cities

25 January 2017 – El Mundo

The residential rental market is riding high at the moment and this good situation is reflected in rental prices, which are soaring in most of Spain’s major cities, according to a study by the home finder Mitula. Specifically, rental prices have increased by more than 60% in Barcelona over the last five years, whilst in Madrid, they have risen by almost 20% during the same period.

In this way, average rental prices in the Spanish capital amounted to around €1,048 per month in 2012, a figure that has grown in a sustained way over the last five years. By January 2017, the average rent in Madrid stood at €1,256, which represents an increase of 19.85%.

Other cities such as Barcelona and Palma have also seen their residential rental prices soar, but to an even greater extent. In the case of the Catalan capital, for example, the average rent has risen from €892 in January 2012 to €1,478 in January 2017, which represents an increase of 65.70%.

Palma has also seen its rental prices move upwards. A rental home in the capital of the Balearic Islands used to cost around €700 per month on average in 2012. Nowadays, the same property costs around €1,000 (€986), up by 40%, according to Mitula.

This upwards trend is being repeated in most of Spain’s major capitals, but there is one exception: Santander. The capital of Cantabria is one of the few cities where rental prices have remained practically frozen. At the moment, a rental home costs €649 per month, on average, which is 2.84% less than five years ago, when the figure stood at around €668/per month.

Original story: El Mundo

Translation: Carmel Drake

Irea: Hotel Inv’t Amounted To €1,363M In YTD Sept 2016

17 October 2016 – Europa Press

Hotel investment in Spain has continued its strong momentum during the first nine months of 2016 to reach €1,363 million, according to a report about hotel investment in the real estate sector prepared by Irea. The report also shows that the figure could rise to €1,800 million by the end of the year. Despite the fact that the investment figure is 16% lower than the level recorded during the same period last year, it is the second best year ever.

Investor interest in hotel assets is still very high and if some of the main operations that are currently on the market are actually closed as a result of the year-end effect then the figure could end up exceeding €1,800 million by the end of 2016. The profile of investors has changed considerably with respect to 2015, when the Socimis (primarily Hispania and Merlin) were the stars and investment involving asset portfolios accounted for half of the total investment volume.

In 2016, operations involving individual assets are clearly dominating the market and are spreading in a general way across the whole country, versus the trend in recent years when there was a higher concentration of investment in traditional destinations.

The increase in the number of hotels sold to date in 2016 has been noteworthy (97 hotels compared to 83 last year), however, the average size per number of rooms has decreased significantly to 142 rooms from 214.

Madrid leads investment with €310 million.

In geographical distribution terms, Madrid leads the investment table for the second year in a row, with €310 million, followed by Barcelona with €302 million (the two regional capital cities account for 45% of total investment). The Balearic and Canary Islands are ranked in third and fourth places with €206 million and €198 million, respectively.

Whilst the figures in the Balearic Islands have remained stable compared to 2015, they have decreased in the Canary Islands after the high volume of investment seen in 2015, when it was the main investment destination in Spain.

Finally, there has been a notable increase in contributions to total investment from secondary destinations. In 2016, hotel investment has been distributed amongst 68 municipalities so far, compared with 44 in 2015 and 25 in 2014, which shows that the hotel investment market is establishing itself in Spain.

Investment is now reaching regional capitals such as Gijón, Oviedo, Orense, Lugo, Granada and Alicante, for example, i.e. places where barely any activity had been recorded in recent years.

The Socimis decrease their level of investment

The profile of investors has also changed markedly since 2015, when the Socimis were the undisputed stars, accounting for almost 50% of total investment volume in the hotel market in Spain.

This year, the Socimis have faded into the background, accounting for approximately €85 million of investment (only 6.2% of total hotel investment), whilst other types of investors have grown.

International investors have invested €585 million to date, almost twice as much as they spent in 2015, led by the Dogus Group, which purchased the Hotel Villa Magna in Madrid and Westmont Hospitality, which acquired a majority stake in Torre Agbar in Barcelona.

In terms of national chains, they invested €276 million in total on the purchase of 32 hotels. Highlights included Hotusa, which was the most active group, purchasing five properties during the first nine months of the year.

Meanwhile, domestic investors spent €304 million on hotels in total. The star of that category was HI Partners, which has acquired seven hotels so far this year, primarily in the vacation segment.

Original story: Europa Press

Translation: Carmel Drake

How Long Does It Take To Sell A House In Spain?

21 June 2016 – Cinco Días

The improvement in the economy, the credit recovery and the belief that discounted house prices have come to an end are all driving up house sales. In fact, several studies agree that it now takes just 10 months to sell a home, on average, when in 2013 it took more than a year. What’s more, in April, homes in good locations with reasonable prices in Madrid and Barcelona were sold within 30 days.

The three major indicators of the real estate market: price, sales and construction have been reflecting an improvement in the sector for months now, and in some cases for years. But another way of taking the pulse of this activity is to look at how long it takes to sell homes, on average. For the time being, the only figures available are provided by private companies operating in the market, such as the appraisal company Tinsa, and the real estate portals Idealista and Fotocasa.

Care should be taken because the results depend on the methodology used in each study, and given that we do not know what happened in terms of average sales periods before 2010, the reality is that all of the cases indicate the same trend: it takes less time to sell a home now than it did a year ago.

The appraisal company Tinsa has been preparing its study for just four quarters (its figures for Q2 2016 are due to be published within the next few days). It obtains its data by cross-checking the volume of supply and demand for homes in all of the provincial capitals and in the country’s five major cities: Madrid, Barcelona, Valencia, Sevilla y Zaragoza. Two conclusions stand out from its finding.

The first is that, on average, during the first quarter of this year, it took 10.5 months on average to sell a home in Spain, slightly less time than during the previous quarter (10.6 months). Although, we should keep in mind that the start of the year tends to be the quietest time for house sales, which could also affect the average sales period.

The second aspect…is the disparity in average sales periods by region. Whilst in some parts of the country, average sales periods are pretty stagnant and have barely experienced any changes in four quarters, either up or down; in other areas, there has been a clear upwards or downwards trend (homes are being sold more quickly or it is taking longer to complete sales, respectively).

In the ranking by province, for example, Madrid stands out because it now takes just seven months to sell a home there; meanwhile, in Cantabria, the autonomous region with the longest average sales period, it takes 19 months to sell a home, almost triple the period reported in Madrid. Other regions at the top end of the ranking include: the two Canary Island provinces, Badajoz and Zaragoza. Whilst, at the other end of the scale, as well as Cantabria, we have Ávila, Álava, Segovia and Ciudad Real, amongst others. The large cities that complete the appraisal company’s study all have a common denominator: they are the areas where average sales periods are decreasing the most quickly.

Meanwhile, Fotocasa’s figures are prepared based on a survey of owners with homes up for sale. Its latest figures relate to 2015 as a whole. Its findings show that it takes 10.6 months to sell a home on average…well below the maximum peak of 13.2 months reached in 2013. In addition, it breaks down the supply by tranches and concludes that last year, just 15% of the homes that were bought had been on the market for more than 24 months.

Finally, recent analysis performed by Idealista shows that in April, 20% of the homes sold in Madrid and 15% of those sold in Barcelona found a buyer within less than a month. (…).

Original story: Cinco Días (by Raquel Díaz Guijarro)

Translation: Carmel Drake

Barcelona Drives Recovery In Spain’s Logistics Sector

4 February 2016 – Expansión

The logistics market is closely linked to the recovery in overall consumption. Last year, logistics warehouses with a surface area of almost one million m2 were leased, up by 37% compared with the previous year. This increase was primarily driven by the market in Barcelona, where companies anticipate a future supply shortage. There, the historical record for new warehouse leases was broken, with 564,000 m2 leased in total, representing an increase of almost 80% compared with 2014, according to figures from JLL.

In Cataluña, the automotive and fashion sectors have continued to feature in the largest operations, although the increase in ecommerce is also driving the sector, and warehouses leased exclusively for the distribution of products sold by companies online accounted for 10% of the total.

Some of the largest operations of the year in Cataluña included: one involving Decathlon, which leased a 40,000 m2 warehouse; another involving Kellogs, which leased 26,200 m2 of space; plus two warehouses owned by logistics operators, measuring 21,000 m2 and 18,500 m2, respectively, which are going to be used exclusively for the online sales of Inditex and Mango.

Moreover, a pre-agreement for the future logistics centre that Amazon plans to open in Cataluña, which will have a surface area of 210,000 m2, was signed in January, which means it will be accounted for in 2016, a year in which the trend (recovery) that began last year is expected to be maintained.

In Madrid, operations were recorded involving a total surface area of 383,000 m2 last year, up by just 2% compared with the previous year, but expectations there are high for 2016, thanks to the projects that are underway and due to be completed this year, including the one in Cabanillas del Campo and another two large warehouses in the Getafe area. (…).

Despite the shortage of large warehouses and the fact that vacancies are decreasing, rents have not yet started to recover, with the exception of in some of the large cities, where the increase has been minimal. Nevertheless, the consultancy firms predict rises in 2016. (…).

The Director of Logistics and Industry at CBRE  in Spain, Alberto Larrazábal, said that, last year “Barcelona exceeded Madrid because it has a pharmaceutical and textile base that the Spanish capital lacks”. Nevertheless, he expects this trend will be reversed in 2016, because “there is no availability in terms of land or finished warehouses in the Catalan capital’s area of influence”.

Investment market

In terms of investment, 2015 was also a positive year: investors spent €734 million, compared with €586 million in 2014. The main players were the Socimis and overseas funds, and their interest resulted in the compression of yields from 8% two years ago to their current level of 6.5%. (…).

Original story: Expansión (by Marisa Anglés)

Translation: Carmel Drake

BBVA Predicts House Building Boom In 2016

5 January 2016 – El Economista

BBVA predicts that there will be a “boost” in house construction over the “next few quarters”, in light of the favourable development, at the end of last year, of indicators such as cement consumption, employment in the sector and transactions involving land.

Those are the explanations provided by BBVA in its latest “Real Estate Flash Report for Spain”, which states that the 13.2% reduction in new build construction permits in October, following an otherwise positive 2015, “may well be temporary”.

On the other hand, the financial institution says that “the other variables reflect that construction activity is likely to continue to grow, although from very low levels”.

Firstly, the report argues that cement consumption recovered in October after decreasing in September; and that the number of employees registered for Social Security purposes in the construction sector also experienced “robust” growth during the months of October and November, putting an end to the lethargy of the previous four months.

In the same way, the financial institution says that business owners’ opinions regarding the future evolution of the residential sector improved in November as a result of an increase in order books.

Finally, the report points out that the land transaction data relating to the third quarter reflects a 72.3% YoY increase in terms of the surface area of land sold.

In parallel to the improvement in property developer activity, BBVA highlighted that demand for housing is continuing to grow thanks to the improvement in the economy. Moreover, it forecasts that, if the current trend in terms of house purchases remains stable, almost 400,000 homes will have been sold in 2015.

Original story: El Economista

Translation: Carmel Drake

INE: Rental Prices Decreased By 0.4% In August

22 September 2015 – El País

The average price of rental housing in Spain decreased by 0.4% in August, with respect to the same month last year, according to the Consumer Price Index (CPI) published by the National Institute of Statistics (INE) earlier this month.

As such, rental prices have recorded 29 consecutive months of decreases and are in keeping with overall CPI (-0.4%). In terms of the monthly trend, rental prices remain unchanged and so, the cumulative decrease for the first eight months of the year amounted to 0.3%.

By autonomous region, rental prices decreased in every region, with the exception of Cataluña (0.3%), the Balearic Islands (0.3%) and Galicia (0.1%), as well as Melilla (0.7%). Meanwhile, the most marked decreases were recorded in La Rioja (-2.9%), Valencia (-1.3%), Madrid (-1.1%), Murcia (-1%), Castilla y León (-0.7%), Castilla-La Mancha (-0.7%), Andalucía (-0.6%) and Asturias (-0.5%).

Aragón, Cantabria and Navarra recorded decreases in line with the national average (-0.4%); and the Canary Islands, Extremadura, País Vasco and Ceuta experienced decreases of -0.2%.

Original story: El País

Translation: Carmel Drake

YTD Apr 15: Construction Permits Increase By 30% YoY

30 June 2015 – Expansión

According to the latest data from the Ministry of Development, the number of permits granted by the colleges of technical architects for the construction of homes amounted to 15,178 during the first four months of the year, up by 29.9% on the same period in 2014 (11,680).

The rate of growth increased significantly in April, since during the first quarter of the year (from January to March), the number of permits increased by just 23% YoY.

In April, the number of permits granted increased to 4,497, which represents an increase of 50.8% with respect to the same month in 2014 and a return to growth after the slow down in March.

Permits started the year with growth of 37% in January, a percentage that increased to 57% in February.

Nevertheless, in March, the trend was broken and the number of permits decreased by 13.6% in YoY terms.

In inter-monthly terms, permits increased by 46.8% in April with respect to the previous month, which represents a change in the trend, since in March, the number had reduced by 27% with respect to February.

Original story: Expansión

Translation: Carmel Drake