Looking ahead to the next five years, Spanish fund managers look favorably on internationalization as a vector of post-pandemic growth, focusing on Europe.
The proximity and cultural similarity of Europe "give peace of mind to the Spanish investor". This is what Rima Yousfan, director of operations at Auxadi, points out, relying on the data compiled in the study The future of the real estate sector in Spain, prepared by her company.
Among the 50 Spanish senior managers of funds specialized in the real estate market that this international financial services firm has interviewed to prepare it, 82% are committed to investing in Europe, and 66% are interested in the Asia-Pacific region.
But, "due to the cultural and language similarities, the abundance of natural resources, the high growth potential and its good infrastructure", there is 60% who have set the goal in Latin America. In this sense, Argentina, Mexico, Peru, Brazil and Panama are the countries that have the most attractive investment for funds in this region.
"The trend that we have been observing, and that our study supports, is that in regions such as Latin America the appetite on the part of private capital for investment in real estate is growing; an interest motivated in large part by the development of logistics , in the heat of the ecommerce boom, and the demand for residential by an increasingly growing middle class, among other factors.That is why it is not surprising that, from Spain, due to the role that our country plays as a gateway entering Latin America, the funds seek to diversify their portfolios through investments in the region," explains Yousfan.
When looking for new investments, ESG criteria have also become protagonists of the new context. In fact, for 72% of managers, demand will increase as real estate funds incorporate these variables into their investment processes. And among the most pressing environmental issues they cite sustainable real estate management, resistance to climate change and energy efficiency.
Logistics, retail trade and hotels are the segments that, in the opinion of experts, will experience the greatest recovery, all of them with growth above 70%, and will be closely followed by residential (68%) and shopping centers commercial (62%).
Challenges to internationalization
However, the managers recognize that cross-border transactions present significant challenges, derived mainly from the diversity of tax regimes and regulatory frameworks, and due diligence processes. Hence, the funds are committed to outsourcing corporate administration services, such as taxation (tax compliance); representation services; accounting; o creation and start-up of SPVs.
On this point, Víctor Salamanca, CEO of Auxadi, shares that the inclination to outsource this type of functions that are so "critical" for the funds, "requires having highly trusted expert collaborators, capable of operating at an international and multi-country level".