Interest in the Spanish real estate sector returns. In 2022, Spain will be part of top-5 European investment in the sector together with Germany, France, the United Kingdom and the Netherlands. Specifically, the planned investment will approach the 7.5 billion euros between the various sectors.
This has been reflected in the sixth report ‘Active Capital’ prepared by Knight Frank. This study collects world predictions for the next investment cycle. “Spain is a very attractive country for investment in real estate assets, thanks to profitability in areas prime above other countries”, Affirms Jorge Sena, partner and director of the Commercial Area of Knight Frank Spain.
Returns in zones prime which are between 3% and 3.5%, for example, in Barcelona. “Foreign investment, investors who buy over half a million euros or family offices they re-activate the investment radar ”, remarks Gerard Marcet, founding partner of the Laborde Marcet consultancy.
We have an example in the luxury segment. “The market is growing at the rate of some 540,000 homes sold, a figure similar to that of 2019,” says Estrella Serrano, directora comercial de Living.
“After the hit of the pandemic, the Spanish real estate sector is recovering strongly, especially in the areas of logistics, data centers, offices and residential. We are sure that 2022 will consolidate the growth we are witnessing now, ”adds Sena.
Cross-border investment
One of the characteristics that this real estate investment will have is that it will be marked by the interest that there will be beyond our borders. “2022 will be a record year for cross-border investment in the real estate sector at volume level ”, highlights the Knight Frank report.
Taking into account the different branches, the consulting firm’s professionals focus on the office market, which “is still very much alive.” Especially in the UK, Germany, France and the Netherlands. An investment that in two thirds will come from investment managers and institutions.
Investors who will also set their sights on the PRS (private rented sector) and student housing. Too data centers, booming by the growth of e-commerce and the world of the cloud, or healthcare are receiving a level of requests for assets never before registered, according to Knight Frank.
Also on the horizon is the gradual withdrawal of stimuli by the United States Federal Reserve (Fed). “If interest rates go up, the returns on real estate investment rates will also go up“, Marcet points out.
Green cities
One of the issues that investors will consider the most in the future before deciding will be that related to sustainability. “Investors increasingly face climate risk and carbon considerations in the cities in which they operate ”, indicated from Knight Frank.
In other words, investors seek to manage their risk. “At the individual building level, a clear sales premium is observed for green-rated office buildings. On the other hand, at the city level, investors are increasingly interested in what surrounds a building. For example, the degree of provision of public transport or how cities deal with the carbon problem and, increasingly, the risks derived from adverse meteorological phenomena caused by climate change ”, they add.
The real estate consultancy has drawn up a list of what it has called green cities by region. In the case of Europe, the only Spanish city that appears is Madrid. Warsaw, Stockholm, London, Dublin, Hamburg or Bergen are others mentioned.
“We expect the real estate market to see more sustainable financing in the coming years, as policy and regulatory attention increases on developing a greener economy,” concludes Judith Fischer, associate from Knight Frank’s European Research area.
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