This share is 11% less than the one registered 10 years ago, revealed the study "Savills Global Living 2020". The study also pointed out that the capital made available by funds for this segment, up until now considered alternative, increased around 60% during the last four years, from 16.400 million dollars in 2016 to 26.300 million dollars in 2020, according to data from Preqin.
This increase was generated by the «segment’s resilience and solid fundamentals» which have remained at the same level even under the current macroeconomic situation. In fact, one of the already verified trends concerns the growing interest in the housing rental market.
Paul Tostevin, director of World Research at Savills, explained that «even under a greater global uncertainty as a result of Covid-19, this segment has resisted better than others this year. Investment activity was boosted in great part by the consolidation of companies from all the subsegments, including multifamily and student residences».
«Despite the pandemic’s macroeconomic short-term effects, the long-term growth of the capital allocated towards alternative assets speaks for itself. Investors are looking for, not only to diversify their portfolios but also stable flows of income, which have made the segment become so attractive», added Paul Tostevin.
In Spain, this is an emergent market
Susana Rodríguez, Savills Aguirre Newman’s CCO, confirmed the market’s evolution in Spain to the global investors present during the online presentation: «It is an emergent market in Spain, where rental dwellings represent 18% of all dwellings on the market. The segment’s strong fundamentals have caught the interest of institutional investment, both for their yields and for key-in-hand developments. We have been witnessing, on the different subsegments, important alliances between international funds and local developers with high solvency who bet on developing quality products in the main provincial capitals, both multifamily and student and senior residences», he added.
Within the European context, Marcus Roberts, head of European Investment and Development, Operational Capital Markets at Savills, remarked that «2020 witnessed some truly impressive transactions, consolidating the segment as one of the most favourable of all asset classes. With long term prospects showing an upturn in global mobility, we expect important opportunities for investors wishing to diversify their real estate portfolios. There is no lack of capital for the segment, the challenge and the opportunity to find prime locations, finished assets or those that can be converted», he added.
Financing maintains a «very strong» position
In terms of financing, although there was some relaxation within the credit markets, in general, the financial market is placed on a much stronger position when compared to the situation it was in during the global financial crisis (GFC). The lessons learned from the GFC, such as the central banks’ rapid interventions, have sustained the liquidity.
Despite banks being more cautious now, alternative financing, which is more frequent now, is willing to assume opportunities with greater risk. Ultimately, the housing segment remains a type of asset favourable to being granted financing due to its long-term fundamentals.
Press Released By Savills Aguirre Newman