Spain, fifth European destination with the highest real estate investment figures
With more than 6,100 million invested through June, Spain consolidates its position as investors’ favorite destination behind the United Kingdom, Germany, France and the Netherlands.
The Spanish housing market continues to monopolize capital interest. With 6,161 million euros invested in the first half of the year, Spain represents 5% of the total volume invested in the European market and consolidated its position as the fifth most-desireable destination with the highest volume transacted until June; with only the United Kingdom, Germany, France and Holland reporting higher figures.
Overall, investment in the real estate market in Europe exceeded 120,000 million euros, which is 10% less compared to the same period last year, which was a record year, according to a report prepared by the consultancy CBRE. Broken down by country, the United Kingdom leads in investment, with 34,400 million euros, followed by Germany, with 24,500 million euros. In both cases, total investment has fallen by 6%. Behind these countries is France, with 11,900 million euros; the Netherlands, with 10,000 million; Spain, with 6,100 million; and Sweden, 5.1 billion.
By type of asset, office space once again attracted the largest volume of investment in Europe, with 52,000 million euros, representing 41% of the total; followed by alternative assets–such as student residences, senior citizen homes or health centers–with 21%; retail (20%), logistics (11%) and hotel management (7%).
Opa over Axiare
Regarding Spain, Colonial’s bid over Axiare has encouraged investment in the sector in the first six months of the year, which, despite everything, is 15% below that registered in the same period the prior year.
The purchase of Axiare, which specializes in office space, by its rival, Colonial, accounted for 30% of the total volume transacted in the first half of the year and triggered investment in office space to 2,036 million euros.
Behind offices, the most active segment was retail. With 1,689 million euros transacted in the first six months of the year, retail accounted for 27% of the total, thanks to the large volume registered in shopping centers with, among others, the purchase of 70% of Parque Corredor by Redevco and Ares for an amount of 140 million euros.
Operations in high street stores also encouraged investment in retail. Last January, acquisition of 16 Inditex stores by the German fund manager Deka were closed, of which 14 are located in Spain, for around 400 million euros. The next largest segments by volume transacted were the hotel sector, with 869 million euros, and logistics, with 716 million euros.
Regarding the residential market, on the other hand, 589 million euros were invested, almost the same figure as in the first half of 2017, while purchases of alternative assets accumulated an investment of 125 million euros.
As for the end of this year, CBRE forecasts the Catalonian real estate market which, following the independence referendum last year, experienced some paralysis, along with the closure of large operations currently under negotiation, will recover and close 2018 with investment levels similar to those of previous years.
Investment in 2017 reached a volume of 12,900 million euros. The director of Capital Markets of CBRE Spain, Mikel Marco-Gardoqui, explains that taking into account the different «large-scale» operations in advanced negotiations and the return of investment activity in Catalonia, prospects for the end of the year are «flattering».
Among these operations is the purchase by Vukile of four shopping centers from Unibail Rodamco for 490 million euros. Specifically, the sale of Los Arcos (Seville), Bahia Sur (Cádiz), Faro (Badajoz) and Vallsur (Valladolid) by the South African fund was closed at the end of July and will be accounted for, therefore, in the computation of closed transactions in the third quarter.
In addition, the closing of the three shopping centers of CBRE GI and Sonae–Gran Casa (Zaragoza), Max Center (Bilbao) and Valle Real (Santander)–for around 500 million euros is expected in the coming months.
According to EXPANSIÓN, the Slovak fund J & T, in alliance with Sonae, is positioned as a favorite to take over this portfolio of collective assets.
Corporate operations will continue to give wings to the sector in the second half of the year. Among operations that will boost the real estate market is the purchase by Blackstone de Hispania. The American investment fund closed its takeover on Hispania last July, after taking control of almost 91% of the Socimi.
The offer from Blackstone, which already had 16.56% of the capital of the hotel Socimi, means to value Hispania at 1,992 million euros and makes the US fund the largest hotel owner in Spain.
Marco-Gardoqui explains that the good macroeconomic prospects for Spain, the potential for revenue growth in the offices sector, the strong growth of electronic commerce and the need for adequate logistics spaces will continue to encourage the real estate sector.
The consultancy also pointed out opportunities in the segment of alternative assets which contain a «wide margin» of development and professionalization, which together with the availability of capital at low cost, will allow it to capture new capital.