Real estate investment in Spain is gaining traction. Specifically, it has registered 2.515 million euros in the second quarter, which is 52% more than in the first three months of the year, according to provisional data from CBRE.
Overall, the volume achieved in the first half of the year was around 4.167 million euros. This represents 19% less than in the same period of 2020, when a volume of 5.160 million was reached, of which almost 4.000 million was closed in a record first quarter.
Among the most significant transactions of the year were Bankinter Investment's purchase of the Montepino logistics asset platform for around 900 million euros; Archer Hotel Capital's acquisition of Hotel Madrid Edition from KKH Capital for 205 million euros; and the purchase of One Central Parc in Barcelona, in the multifamily sector, by DWS from Värde Partners for 128 million euros.
«With interest rates at record lows and high liquidity in the financial markets, investor appetite for real estate, especially for assets that offer greater income security, remains high. Uncertainty, which has yet to be completely cleared up, but undoubtedly with a better prognosis than six months ago, keeps the market polarized, based on the risk that investors perceive by sector and/or by asset», explains Lola Martínez Brioso, director of the Research Department at CBRE Spain.
By sector, investment in the first half of the year was marked by high interest in industrial and logistics product, which accounted for 29% of total investment with a volume captured of 1.216 million euros, thanks to Bankinter Investment's purchase of the Montepino logistics asset platform. With that figure, the second quarter of 2021 achieves the second best historical record for that half-year, only behind 2017. According to CBRE, total investment volumes in this sector are expected to reach over 2.000 million in 2021, which would be a historic volume.
Investor interest in the multifamily sector (rental residential and student housing) continues to be reflected in the investment volumes recorded, which would be higher if there were more product on the market, according to the consultant. This sector accounted for 24% of the total volume during the first half of the year, a total of 995 million euros, of which only in direct residential (BTR and PRS transactions) more than 750 million euros were transacted, only 8% less than in the same half of 2020.
Hotel and office sectors
The hotel sector reached 838 million euros during the first six months of the year, exceeding the figure recorded in 2019. In the hotel market, 55% of the amount transacted in 2021 was product sold by hotel chains and groups. «This trend could accelerate during the rest of the year as aid to the sector is lifted, which will lead many groups to look for other sources of liquidity with the divestment of assets. There is a lot of interest in this segment from investors who had not previously invested in it, a sign of a clear commitment to the sector's recovery», Martínez stresses.
Investment in the office sector has declined compared to the previous year, registering a volume of 479 million, down 52% year-on-year. «Contrary to what this figure may reflect, investor interest in offices remains high, albeit more selective than before the pandemic. The lack of product for sale, in the case of Madrid, is one of the major handicaps that the sector has had in recent months, although the number of open processes in the market is increasing and activity will be greater in the second half of the year», explains the executive.
In the retail sector, excluding sales of large shopping centers, the volume of investment is around 243 million euros, which represents 6% of the total invested in the first half of the year. In this respect, Martínez comments that «this figure is a far cry from the figure achieved in the same period last year (1.522 million euros). However, we expect these volumes to increase in the second half of the year, thanks to ongoing operations involving both supermarkets and retail parks».
In other non-traditional sectors, the healthcare segment showed its resilience, with amounts double the figures recorded in the first half of the previous year, with a boom in the sale of nursing homes. In this regard, the sale by Batipart to Confinimmo of 24 nursing homes in Spain and Italy (18 of them in Spain for a total of 150 million euros) was particularly noteworthy. «Additionally, there is a growing interest in entering the data center sector, for example, but also others such as storage rooms, campsites, agribusiness... All of this with the aim of obtaining higher returns than those recorded in the traditional segments», added the CBRE director.
New investors are looking for opportunities
Domestic investors have increased their share in the first half of 2021, as they represent 49% of the total volume invested compared to 26% in 2020 and 36% in 2019. In this context, they direct their investment to the industrial and logistics sector (959 million) and the hotel sector (474 million).
Among international investors, the protagonists have been those from France and Germany, with 9% of the total investment, respectively, as well as those from the United States, with 8%. «We are also seeing new investors entering Spain in search of opportunities», stresses Martínez.
Institutional and investment funds continue to be the main players. Spanish Socimis remain at the same levels with respect to 2019 and 2020, encompassing 7% of real estate investment.