MADRID – Despite the effects of the corona pandemic on the Spanish real estate investment market, 2021 is performing very well. According to a recently published ranking, Spain is the fifth market with the most investment in tertiary real estate.
The list was drawn up by Catella and Urban Land Institute and covers the first half of 2021. In total, Spanish real estate has brought in €5.2 billion. This is surpassed only by the major markets of the old continent, such as France, Great Britain, and Germany. In Catella’s research, Spain is in fifth place, when the investments of all Scandinavian countries are added together.
“Spain is an attractive market for several reasons: a large population, with large cities and the main growth engines. The return/risk ratio is higher than in other countries and the Spanish real estate sector is recovering strongly after the pandemic, especially in logistics, data centres, offices and residential areas,” explains Thomas Beyerle, Head of Research at Catella Group, on the Real Estate Capital Flows EMEA meeting of ULI Madrid NEXT, which was accessible exclusively to Brainsre.news.
In addition to Spain being the protagonist due to its position among the major markets, the return of the United Kingdom to the top spot in real estate investment in Europe is a novelty.
“For the past three years, Germany has been number 1 but investors believe that the uncertainty of Brexit has been overcome and put the UK back in that position,” underlines the head of Research at Catella.
The national investor, clear protagonist
The travel restrictions have had a clear impact on the profile of the real estate investor in Europe. For example, domestic buyers before the pandemic represented less than 40% of total real estate investment. Now that figure stands at almost 50% of the total.
“Many of the investments now being made in European countries are led by buyers from the countries themselves, but cross-border activity is returning to March 2020 levels,” says Thomas Beyerle.
2022 a record year for cross-border investment
“Prognoses suggest 2022 will be a record year for cross-border investment in the real estate sector in Europe,” they say of the consultancy. In the case of Spain, the German investor is the clear protagonist. In total, in the first six months of 2021, €1.26 billion was invested by German funds in Spanish brick. This was followed by American and French investors.
The two main players after the pandemic, in Spain, and throughout Europe, are rental housing and logistics properties. “The challenges posed by the pandemic in the retail and logistics sector have increased the risk of the former compared to residential rental, which has not been affected,” said a Catella spokesperson.
The consultancy believes that the market is still ‘very lively’. This is despite figures for the last six months reflecting a decline in investment in offices.