74 / 110
74 // iberian.propery / 2017
dossier// ISSUE: TOP IBERIAN Investors
The main challenges that face investors in the
Iberian market involve above all: the need to as-
sess investment intentions within a competitive
context, where the time needed to evaluate an
investment opportunity correctly may conflict
with the availability to carry out the investment
intentions; predicting the reversal of the market
trend; and the fact that the available indica-
tors (namely rental values applied in the office
markets) do not reflect the market reality. I will
explain this last point using the practical exam-
ple of the office market in Lisbon: the market
indicators for prime rents do not reflect the ac-
tual prime rents practised because the buildings
where these are being applied display physical
characteristics that raise doubt regarding their
classification as “
prime
” due to their age and con-
dition. This situation is a consequence of a lack
of investment in the office market, aggravated
by the fact that, from the pipeline for the next
two years (approximately 58.000 m2), only 25%
(11.000 m2) of the areas are currently available.
It would be much easier to define a pan-Iberian
strategic plan if there was more awareness re-
garding the specificities of each market, and in
this sense I amnot distinguishing countries, Spain
or Portugal, but cities (Madrid, Barcelona and
Lisbon). The strategy should also include cities
where investment is not as obvious due to a lack
of indicators – such as the city of Porto – but that
are experiencing great momentum and growth.
Paulo Silva
Aguirre
Newman
Managing Director
Spain is undoubtedly an appealing country for
international and national investors in the real
estate industry. Only in 1Q 2017, around €3.8
billion have been invested in our country, a figure
in line with those achieved in 2016 and 2015.
But where, how and why is it being invested?
In addition to the more “
traditional
” assets such
as retail, office, logistics or residential assets,
other types of properties -so-called alternative
assets- are emerging. These include hospitals,
student residences or elderly homes, especially
the latter type. The returns on these businesses
are not as high as on other real estate assets,
although they are sustainable and -due to de-
mographic reasons- their demandwill not stop
growing in the coming years.
In Spain, these centres have traditionally been
managed by families or religious institutions,
and little by little, both national and interna-
tional investors specializing in the manage-
ment of these assets have started to acquire
and build them not only in a region or specific
area but all over the country, in search of a
considerable volume making efficiency pos-
sible in terms of staff management, resources
and beds. These funds, whether pension or
mutual funds, provide capital and manage-
ment and search for these assets capable of
providing a 4.5-6.0% return rate. In fact, only in
2017 the total amount invested on these assets
is expected to reach €750 million.
Luis Martín Guirado
Gesvalt
Corporate Director
of Business
Development
Alternative
Assets, the new
focus of real
estate investment