The report reflects the national and international state of the real estate market according to its professionals' estimates (more than 1.700 responded).
The decreasing growth in demand in Spain (both in terms of occupancy and investment) is reflected mainly in the retail sector. Meanwhile the economy's growth cycle explains why the expectations point to a firmer growth in the industrial and office sectors.
The availability of properties for investment grows in every sector
Foreign investment demand has increased steadily in all sectors. Furthermore, the availability of properties for investment has increased on all market sectors during the third quarter.
The Investment Sentiment Index has dropped to +19, compared to +32 in the second quarter. Similarly to what happened with the Occupier Sentiment Index, this is the lowest value since 2014, nevertheless the prospects remain solid.
40% of respondents in Spain consider that the real estate market is above its real value, against 27% in the second quarter. Lastly, we should highlight that 41% of respondents understand that the market is on an ascending spiral, while only 15% think it has reached its peak.
Demand largely surpasses the offer in Portugal
On the other hand, the results from the Portugal Commercial Property Monitor show that, in the third quarter, there was a significant decrease in the available occupancy market in Portugal, with the demand largely surpassing the offer. This is particularly visible in the office sector, which has seen consistent rental prices' growth as a consequence.
As a result, the Occupier Sentiment Index grew to +47, a new record for the series started in 2013, confirming a robust occupancy market in Portugal.
On the investment side, the market is still strong, registering a solid activity from the investors, with the Investment Sentiment Index dropping slightly from +45 to +40. Nevertheless, this firmly positive reading continues to signal solid overall conditions in the investment market at present.
For 63% of respondents, the Portuguese commercial real estate market currently has a fair value, compared to 53% in the previous quarter. 50% of respondents believe the market is close to reaching the cycle peak. A more favourable economic climate should continue to help, even if the growth in 2018 ends up being slightly less than in 2017.
The Iberian Commercial Property Index will be presented on the 25th of January in Porto. Find out more about it here.