INVESTMENT SOARS 32% IN IBERIA IN THE FIRST YEAR AFTER THE PANDEMIC

This result was estimated by Iberian Property Data©, whose database identified a sample of 421 real estate investment operations completed in Iberia throughout 2022, totalling €18.6 billion, representing an annual growth of 67% in the number of transactions (251 in 2021) and a 33% increase in the capital invested (€14 billion in 2021).

Therefore, and consolidating the recovery initiated last year, capital markets have surpassed the pre-pandemic performance, overtaking by 22% the previous record of €15.2 billion attained in 2019, a year when 288 investment operations were concluded.

Reflecting the size of each market, the largest share of capital (84%) was traded in Spain, with 350 operations amounting to a total of €15.5 billion, while Portugal attracted the remaining 16%, valued at a little over €3 billion. However, it is interesting to note that both countries maintained stable shares compared with 2021, although Portugal presented a higher growth in annual terms, surpassing by 39% the €2.2 billion registered the previous year. In the Spanish market, the growth was 32%, compared with €11.8 billion traded one year before.

Looking in greater detail, the Madrid region stands firm as the undisputed leader of Iberian investment, attracting 23% of the total amount traded, namely €4.3 billion, followed by Barcelona, with a 16% share and the equivalent of a little over €3 billion, and only afterwards Lisbon, with 7% and almost €1.3 billion. In addition, another €8.2 billion were traded in Other Regions of Spain, approximately 44% of the total, and €1.6 billion were traded in Other Regions of Portugal, representing 9%; aside from €172 million in transactions in the Porto region, with the second largest city in Portugal representing just 1% of the total amount.

Compared with the previous year, the Catalonia region, led by Barcelona, lost some ground, with this region’s share reducing eight percentage points (p.p.), resulting from a y-o-y decrease of 11% in the investment volume (€3.4 billion in 2021); and the same occurred in Porto, which displayed a decline of 2 p.p. from the 3% share held in 2021 (€370.2 million). In the case of Lisbon, although the capital allocated to the region grew 18% in annual terms, the region’s share of the Iberian market as a whole dropped 1 p.p. from the 8% share achieved the year before. In contrast, Madrid’s share increased 4 p.p., compared with 19% in the previous year. Other Regions Portugal saw their share climb from 5% to 9% during the period under analysis, resulting from a 116% growth compared to the €736.7 million invested in 2021, while the share of Other Regions Spain presented a slight decrease of 1 p.p. compared with the 42% share achieved the previous year.

One of the novelties in 2022 was the return of retail to the leadership of capital markets, with €4.81 billion euros in transactions – the equivalent of 26% of the total value invested in Iberia – standing as the preferred asset class among investors. This figure represents an increase (+170%) from €1.78 billion traded in this asset class the previous year, doubling the sector’s share from the 13% held in 2021, which relegated it to 5th position in the ranking.

A sign of changing times, the multifamily segment went from 4th place in 2021 to 2nd in 2022, attracting 21% of the total investment, the equivalent of €3.94 billion. This result represents a y-o-y growth of more than 63% from the €784 million traded in 2021, and an increase of 4 p.p. compared with the share of 17%.

Maintaining their position from 2021, hotels close the podium in 3rd position, achieved thanks to an investment volume of €3.64 billion in 2022, 20% of the total. This performance surpasses by 29% the €2.83 billion traded one year before, although the market share remained stable.

Meanwhile, offices dropped from the 1st position (23%) in 2021 to 4th place in 2022 (17%), with the accumulated investment in this sector registering a slight decrease (-2%), from €3.27 billion to €3.22 billion.

The investment in Logistics assets decreased 14% during the period under analysis, from €3.17 billion to €2.54 billion, with this sector’s market share shrinking 9 p.p., from 23% in 2021 to 14% last year, leaving the 2nd position to occupy the 5th place in the ranking by asset class.

Likewise, and maintaining the trend initiated in 2020, alternative assets lost ground again in 2022, with the amount invested going no further than €436.87 million, in other words, 19% below the €538.45 million obtained one year before. As a result, this segment’s share halved from 4% to 2%, with this asset class once again at thetail end of investor preferences.

Maintaining the trend observed in 2021, last year was even more dynamic for portfolio sales, with Iberian Property Data identifying 99 operations of this type, amounting to €9.97 billion in investment, the equivalent of 54% of the total amount traded in Iberia throughout the year. Once again, and as in 2021, this type of deal was more prominent in the Portuguese market, leveraging 65% of the annual investment – with €1.97 billion distributed across 20 operations -, while in Spain, portfolio sales represented 52% of capital markets, generating 79 deals worth €8,01 billion.

In all of Iberia, there were 290 single-asset deals, amounting to €8.42 billion, the equivalent of 46% of the capital allocated to the sector in 2022. This type of transaction carried greater weight in the Spanish market, with 241 deals and €7.54 billion, representing 48% of the total amount invested in the country. In Portugal, single-asset deals represented 35% of the total national investment, with 49 operations and a total value of €1.08 billion.

Institutional capital clearly predominates in the Iberian market, leading 63% of the investments carried out in 2022: €11.73 billion. Private Equity contributed €3.49 billion euros, 19% of the total amount, followed by REITs & SOCIMIs, with €2.58 billion, around 14% of the transaction volume. The public sector performed operations worth €139 million (1% of the total), while it was not possible to determine the origin of the remaining 4%.

Regarding nationalities, foreign capital was predominant in Iberia, representing 62% of the total (€11.47 billion), while domestic investment is worth the remaining 38% (€7.12 billion). However, while in Spain there is an evident balance between international (58%, €9.01 billion) and domestic (42%, €6.53 billion) investment, in Portugal the gap between foreign and domestic capital was much wider, with the first representing 81% of the market (€2.46 billion), against just 19% of Portuguese investment (€588 million).