Commercial interest in Spain is green light for investors
Once commercial investors return to the market it gives buyers a green light signalling growth is on the way and this is likely what is happening in Spain. Residential sales may still be lacklustre, but research from BNP Paribas Real Estate has shown Spanish property investment is on the up. Between the first and third quarters of the year, some €2 billion (£1.7 billion approximately) was ploughed into the commercial real estate market. Large portfolio acquisitions in retail made up a considerable proportion of this, followed by the office sector and hotel market.
Madrid and Barcelona were the main sites of investment, with the average value varying between €20 million and €40 million. Interest has also been increasing for housing portfolios - another sign the tides are turning for the residential market. Luis Martín Guirado, president of BNP Paribas Real Estate Spain, said: "The opportunities offered by Spain as a country go far beyond the success which it has justifiably achieved in fields such as tourism, sports and cuisine. So why do we believe that this year will be particularly favourable for real estate investment in Spain? We are seeing capital values for all types of real estate assets and the price of land at the lowest levels seen in recent years, representing a unique opportunity."
Valencia is another city worth targeting and alongside Madrid and Barcelona, it is expected the area will enjoy moderate but stable rents before growth returns in the future. Mr Guirado believes yield compression will take place, driving good returns for investors in all sub-sectors. However, it is unlikely this will occur until the second half of 2014, as improvement is dependent on the recovery of the occupational market.
Access to credit is also likely to remain a problem for all investors, be they commercial or residential. This means to capitalise on Spain's low prices, buyers need to come to the table in a strong financial position, with as much cash as possible.
Madrid and Barcelona were the main sites of investment, with the average value varying between €20 million and €40 million. Interest has also been increasing for housing portfolios - another sign the tides are turning for the residential market. Luis Martín Guirado, president of BNP Paribas Real Estate Spain, said: "The opportunities offered by Spain as a country go far beyond the success which it has justifiably achieved in fields such as tourism, sports and cuisine. So why do we believe that this year will be particularly favourable for real estate investment in Spain? We are seeing capital values for all types of real estate assets and the price of land at the lowest levels seen in recent years, representing a unique opportunity."
Valencia is another city worth targeting and alongside Madrid and Barcelona, it is expected the area will enjoy moderate but stable rents before growth returns in the future. Mr Guirado believes yield compression will take place, driving good returns for investors in all sub-sectors. However, it is unlikely this will occur until the second half of 2014, as improvement is dependent on the recovery of the occupational market.
Access to credit is also likely to remain a problem for all investors, be they commercial or residential. This means to capitalise on Spain's low prices, buyers need to come to the table in a strong financial position, with as much cash as possible.
PUBLISHED : 13TH NOVEMBER 2013
