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2017 / iberian.propery // 47
ISSUE: TOP IBERIAN Investors //dossier
IPD Pan-Europe Annual Property Index
This index is based on the IPD indexes for Austria, Belgium, Czech
Republic, Denmark, France, Germany, Hungary, Ireland, Italy, the
Netherlands, Norway, Poland, Portugal, Spain, Sweden, Switzerland
and the U.K., as well as the KTI Index for Finland.
The IPD Pan-Europe Annual Property Index tracked the perfor-
mance of 48,918 properties and 765 portfolios with a combined
capital value of € 733.6 billion.
IPD Iberia Annual Property Index
This index tracks the performance of 1.083 property investments,
with a total capital value of € 27.8 billion as at December 2016.
The IPD Spain Annual Property Index tracks the performance of 40
portfolios and 511 property investments, with a total capital value
of € 20.5 billion as at December 2016. The IPD Portugal Annual
Property Index tracks the performance of 30 portfolios and 572
property investments, with a total capital value of € 7.2 billion as
at December 2016.
now. While a number of countries are still posting very strong double digit
returns, for others this moderation has seen capital values begin to decline
».
In 2016, a year when most capital markets in European countries had a
«moderate» performance, with several markets decelerating or stabilis-
ing, Portugal, alongwith the Netherlands, was the exception, presenting
positive results. These were the only two countries where returns on
investment increased significantly in the period analysed, rising from
11% to 12.2% and from 7.7% to 10.3%, respectively.
Results in Iberia among the best in the decade
The 12.2% return presented by the IPD Portugal Annual Property Index
2016 is in fact the highest result attained by the Portuguese market in
the last decade. In turn, in 2016 the Spanish market obtained the second
best result since 2007: 13.3%, surpassed only by the 15% achieved in 2015.
According toMSCI, the strong performance of Iberian commercial property
in 2016was drivenmainlybycapital growth, due to additionalyield compres-
sion and rising rental values, which occurred in almost all market sectors.
Last year, capital growth was most pronounced in the Spanish market:
7.8%, while in Portugal capital growth reached 6.2% (comparedwith 4.9%
registered in 2015).
Regarding income return, it was in Portugal that this index recorded the
best result in Iberia, at 5.7%, compared with 5.1% in the Spanish market.
Industrial leads in Spain and Retail in Portugal
Concerning the best performing sectors, the differences between the two
Iberian markets are evident. If in Spain almost all asset classes recorded
double-digit total returns in 2016, the same cannot be said for Portugal.
Industrial was the sector that stood out the most in the Spanish market,
delivering a total return of 13%, followed by Retail and Offices, with 12.9%
and 11.6%, respectively.
In Portugal, the scenario is quite different, with the IPD Index recording a
great discrepancy in the performance of “
traditional
” asset classes. Thus,
while Retail delivered returns of 16.4%, Offices did not exceed 3.1% in 2016,
while returns from Industrial assets remained negative (- 2.0%), despite a
better performance than in 2015. We must, however, note the good per-
formance of alternative assets in the Portuguese market, referred to as
“
Other
”, andwhich, on a national level, delivered the second best return: 6.3%.
Regarding the different best performing real estate formats, the trendwas
the same across Iberia, with large shopping centres leadingwith the highest
returns, MSCI revealed, adding that in Portugal, the return was 19.3%.
In 2016 the total return
on commercial property
investment in Iberia
was 13.6%, according to
the IPD Iberia Annual
Property Index.