On the other hand, retail assets have experienced a slight adjustment with quarterly decreases in terms of their market valuations. This is the information provided by the second quarter’s results of Índice_CBRE (CBRE Index), a parameter which attributes a value to listed companies’ assets. The study is developed by the consultant’s Valuation & Advisory Services division. 231 buildings valued at a combined total of more than 6.9 billion euro, were analysed.
According to CBRE’s Index, logistic assets stand out, on the 43 transactions analysed (representing more than 1.4 million sqm and 1.411 billion euro), the assets’ value increased 4.34% when compared to the previous quarter surpassing the previous 1.45% quarterly increase.
«The logistic segment has stood out as one of the undisputable leaders within the real estate sector. The most relevant logistic operation of the last few years in Spain took place during the second quarter with the sale by Montepino to Bankinter of 95% of the society consisting of 22 assets. This operation alone represented 1 billion euro», remarked Fernando Fuente, senior director valuation & advisory services at CBRE España.
«The investors’ appetite for last mile products and products with long-term contracts, which has produced a prime yield compression, fixing it at 4.25%», he further detailed.
According to CBRE’s report, rents remained stable between April and June. Daniel Zubillaga, senior director Advisory at CBRE España, commented that «rents are not expected to change significantly in the coming months, but there should rather be an increase in incentives for new rental contracts. The offer increase of grade A warehouses is preventing a rental prices’ increase».
Housing rental, another segment on the rise
In terms of the housing rental segment, also one of the current leaders within real estate with more than 771 million euro invested during the first quarter, the analysis of the 103 assets assessed represented a total combined value of more than 1.1 billion euro. The report showed a quarterly revaluation of 1.11%, following 0.78% increase during the whole of 2020.
«The peak of the housing rental segment was generated by different elements such as the growth of rental versus buying in terms of decision taking and accessibility to the buying market from the final user; increase of the investors’ appetite for this type of assets (with attractive returns) and the generalised professionalisation of the segment», remarked Fuente.
In terms of the market rents, the trend registered at the start of the year remained. The areas where growth had been higher (such as Madrid’s central area), experienced certain adjustments. On the other hand, in the more secondary areas with a less pronounced growth, rents remained stable. «The short-term trend will be for stability, whereas for the mid to long-term trend a slight upturn is expected, as well as an increase in corporate transactions by investors wishing to position themselves in the market», remarked Zubillaga.
In terms of the office segment, the assets’ valuations’ behaviour, following the analysis of 27 assets with a total combined area of more than 300.000 sqm and an aggregated value of 1.655 billion euro, was positive during the second quarter, having registered a 1.04% increase when compared to the previous quarter, when valuations were adjusted at -0.47%.
Faced with this data, Fuente highlighted the segment’s behaviour in 2021: «The office market started 2021 very strong in Barcelona, both in terms of take-up as in terms of investment. On the other hand, in Madrid, the beginning of the year was much more moderated. We are now seeing that occupants and workers keep seeking balance between work from home and work at the office, attentive about the pandemic’s growth and vaccination». The expert pointed out that «the occupancy rate has also been following the increase trend in both markets, followed by a slight rent adjustment».
The report also shows us the market’s polarisation between Grade A buildings well located and 100% occupied and lesser quality buildings, withe vacancy and in secondary locations.
Slight adjustment for retail assets
Amongst the assets from traditional segments, those from retail are the only ones to have had a slight adjustment during the second quarter of 2021 (-0.21%).
«As the vaccination plan progresses and with the arrival of good weather, retail’s recovery in terms of sales and affluences seem to consolidate. With this relative calm, retailers seem more willing to retake their expansion plans. Throughout this quarter new deals have come to light, such as New Balance’s signing of the agreement for a new store in Fuencarral 3», stated Fuente, who further clarified that «nevertheless, the agreed rents are very far from pre-pandemic numbers and it is hard for owners to accept that along with the fact that High-Street variable rents are here to stay».