Five reasons to invest in real estate in Spain
After more than five years of crisis, uncertainty about when to recover the brick industry has given way to a widespread optimism, thanks largely to the closure of operations of foreign investors. “It has opened a new stage in the Spanish property market. In recent months, we have seen how what seemed impossible a year ago, has now materialized. Foreigners have seen the opportunity and start thinking that investing now in Spain, get attractive returns in the future, “noted the President of the Association of Real Estate Consultants (ACI).
Now converge several factors:
1. More profitability. The economic difficulties have fired the risk of investing in Spain, penalizing any operation in this market and forcing vendors to improve their offer. “For a mall in a town of Germany, have a yield (profitability) of 4.25%, while in Spain they are closing prime center operations with 7%” says Ismael Clemente, CEO of Magic Real Estate , Blackstone partner in the purchase of 1,860 social housing the City of Madrid. This return on investment will be lower (in some operations than two digits) when the perception of the Spanish economy improves. “Investors discount while we’re at a turning point,” says Alberto Prieto, CEO of Knight Frank. Adolfo Ramirez-Escudero sees, president of CBRE, looks likely that if Spanish economy improves so do prices.
2. Price drop. Santiago Aguirre, president of Aguirre Newman, estimated price declines around 50% overall and varies by location and type of property. Some rebates have reactivated purchases and, in some cases, prices have already increased.
3. Sareb Operations. Since the launch of Sareb earlier this year and above all, the closure of its first sale in block in August, there has been a pull factor in search of better opportunities. The Society of assets Proceeds from Bank Restructuring (SAREB) announced has a very strict business plan, that allows to sell more than half of its assets (has a portfolio of 50,000 million in assets and loans) in five years.
In its first year, Sareb already achieved sales of 1,200 million euros and is expected to reach 1,500 million at year end. So, has launched nearly a dozen operations (Bull, Bermuda, Corona, Abacus, Teide and Harvest, among others), whose processes are fast and do not give option to investors to doubt whether or not to participate. “They’re going to run ten trades until year end,” predicts John Pepa, Lone Star CEO Europe, finalist in the operation background Bull, which won HIG Capital.
4.Multiple candidates . “There are over 200 funds willing to invest in Spain,” said the president of Aguirre Newman. After years studying the Spanish market, many international investors are willing to invest in Spain. “We have a great opportunity in Spain to convert that positive noise in jobs”.
5. Alliances . In the market there are important not only lots of assets, also real estate, with a large market know-how that can be strategic partners for international funds , usually without equipment in Spain . ” There are some investors who are still stuck in the situation of 2012 where the price was the only thing and there are others who are starting to work differently , through partnerships , said John Beard , director of real estate for Sareb , a company that has used the FAB , some vehicles that assets managed jointly with investors funds . “In the future we will see partnerships between foreign investors and local managers , as it is not just about buying and real estate debt but it has long-term vision ,” he adds.
The CEO of Colonial, Pere Viñolas, foresees changes in the capital of the great Real estate “to be more specialized and more global” to be selling financial institutions. “A missing piece are debt funds that are already coming and you can boost the sector.” Rental While most experts believe it is good time for shopping, still no improvement in the rental business, or income or hiring