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Commercial Real Estate in Spain is Recovering Rapidly

Investment into the Spanish commercial real estate sector is at the highest rate since 2007 after almost a decade in recovery mode after the global financial crisis.

The year 2007 marked the end of a decade long bubble of growth to almost uncharted heights in the Spanish property sector before the bubble burst and saw Spain’s economy hit the lowest levels in its history.

Since 2014 foreign investment into commercial real estate has been increasing steadily and now economic analysts and forecasters are predicting a great 2018 for the country and commercial real estate sector in Spain.

This is backed up by the transfer of many real estate assets and loans from many leading banks in Spain to international investment funds who have enough confidence in the economy and sector after 4 years of impressive growth and progress.

The figures for 2017 make for remarkable reading with 8.7 billion euros of commercial real estate investment in Spain, compare this to the 1.9 billion invested in 2011 and the signs are good as we head into the second week of 2018.

Compared to other Euro zone countries, Spain is leading the way and no one expects this to halt during 2018, only increase and continue to thrive.

It’s basically the year when it’s all come together,” said Ismael Clemente, founder and chief executive officer of Madrid-based Merlin Properties Socimi SA, Europe’s third-largest real estate investment trust. “The Spanish economy is doing well, its banks are healthy, there’s a very investor-friendly legal framework and property is still cheap compared to other European cities.

Data from Savills highlights the growth;

Over two thirds of the money invested in 2-17 came via overseas investors with the leading sectors of commercial property being retail, hotels and offices with Spanish shopping centres offering an average annual net yield of 4.25 percent.

For anyone thinking of investment into overseas commercial real estate Spain should be a huge contender.

 

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