Monday, July 21, 2014

The commercial real estate investment in Spain reached post-crisis highs

The interest of international and institutional investors by the Spanish commercial real estate market has hit a new post-crisis record. With nearly 2,500 million in the first half of 2014, investment grew by 110%, according to data from the consulting firm BNP Paribas Real Estate.

The interest of these foreign operators, together with the activity of the newly created Socimi, Spanish REITs, has provided non-residential investment in Spain during the first half of the year has been fired in annual terms. Retail assets have obtained the largest market share, with 38% of the total amount invested, followed by hotels (29%) and offices (27%).

Although domestic investment has grown 150%, starring purchases totaling 810 million euros in the first six of the year, the bulk of foreign investment has been -65% of the total. Of particular importance have investors from non-traditional areas in the Spanish market, such as China, Latin America or the Persian Gulf.

During the study period, institutional investors have also confirmed their interest in the Spanish market, leaving for private investors, both domestic and international, only 18% market share, 12 points less than in 2013.

A institutional funds and REITs has fallen 64% investment of the semester, and is expected to Socimi activity to accelerate in the second half of 2014 and 2015 Chapter seller, highlights the activities of financial institutions, themselves or through their estate, and real estate companies.

Strong competition for prime assets, which have been virtually exhausted in the office and retail segments of the two major cities, Madrid and Barcelona, ​​has had the effect of compression of prime yields. Thus, the prime office yield has gone from 5.8% to 5.6% in Madrid and from 6% to 5.75% in Barcelona in the last quarter.

"All indications are that during the remainder of 2014 will remain the same frantic activity in the investment market that has been taking place since the end of 2013 beginning of improved absorption of space in early 2015 is expected with consequent improvement return on assets. however, is to provide a new understanding of the rates of return on core assets in prime locations, both office and retail. sector is experiencing a diversification into opportunities in secondary markets and real value added "explains Francisco Manchon, investment director at BNP Paribas Real Estate in Spain.

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