Investment into Spanish real estate reaches record figures
While it may be hard to believe, taking into consideration that Spain endured a crippling recession for six years and has only really begun to expand economically again since last year, investment into Spanish real estate has reached record figures.
The amount of money poured into all types of property construction this year will register in excess of 13 billion euro by the end of the month.
This is 25% more than in 2014, three times the amount invested in 2013 and greater than the total raised in 2007 before the property bubble burst, sparking off the economic crisis.
According to leading global property company CBRE, next year is also expected to see more than 10 billion euro-worth of investment in Spanish real estate, with office rentals and commercial property really taking off.
Up to this moment, more than 70% of all investment into real estate in this country is comprised of foreign money. Much of it originates from America, the UK or France.
And 45% of the activity is carried out by socimis or Real Estate Investment Trusts, although Spanish companies are now much more involved and active than they were before.
Before the end of this year, Merlin Properties, Spain’s leading listed real-estate company devoted to commercial assets in Spain and Portugal, will close a deal worth 3 billion euro in which it will take over property management company Testa from Sacyr.
The offices sector has generated the greatest amount of investment – 5.6 billion euro – which means that Spain sits in fourth position for investment, behind the UK, Germany and France. And much of this business is concentrated in Madrid and Barcelona, with 40% more money generated in the capital this year compared with 2014.
Investment into retail property and commercial centres reached 4 billion euro, a similar figure to last year.
For the first time since the economic crisis, commercial and retail rental prices have gone up by between 5 and 10%, basically due to an increase in sales and shoppers.
With regards to residential property, the market is divided into two and is operating at different speeds. Sales have taken off in areas such as Madrid, Barcelona, the Costa del Sol and the Levante region. Next year, activity is predicted to pick up in Valencia, Bilbao and Malaga.