On the occupancy side, throughout the first quarter, the demand for space occupancy continued to grow throughout the first quarter in all sectors (offices, retail and industrial), transversely to the entire Iberian territory. A trend that has been reflected in the decrease of available stock, and in the reduction of incentives granted by landlords in almost all segments.
A scenario that supports the positive projections on the evolution of rents. While noting a slight slowdown in growth for the second consecutive quarter, respondents in Spain anticipate sharp rises in almost all prime sectors, over the next twelve months, and much more modest in the secondary segments. In Portugal, the largest and most pronounced rise in rents expected in the next 12 months will be in the office market, with solid gains also being anticipated in the retail and industrial prime sectors as well as in the secondary offices; while industrial and retail secondary incomes should stabilize.
Investment: momentum renewed in Portugal
Investors' sentiment regarding Portugal was the strongest in recent years, with ICPM observing the strengthening of trust in the current momentum of the market; while in Spain the answers suggest a certain restraint.
On both sides of the border, investment intentions continued to increase in all market areas, with the pace of growth steadily increasing in Portugal. Demand from foreign investors continued to stand out in both countries, having grown the most in the Portuguese market, where offices and retailing harvest their preference.
While in Spain the stock of assets for sale remained stable for the third consecutive quarter, in Portugal the available supply decreased in the first quarter of 2018. In the Spanish market was, however, a slight increase in the industrial stock, while in Portugal the retail stock remained stable.
Capital valuation expectations in the next twelve months remain positive across all sectors in both countries, and in line with the results observed in previous editions of this barometer. As for Spain, the respondents consider that the valuation of the prime assets should surpass the secondary ones by a good margin, anticipating modest gains in the latter. As for Portugal, projections for the industrial market have been revised upwards, although the surveyed indicate that the strongest gains are still in prime and retail offices.
The dominant feeling in Iberia is that the market is now in the middle of the recovery cycle.
To know in detail the results and main conclusions of Commercial Property Monitor Iberia, see the full version of the reports for the Spanish and Portuguese markets.