Office real estate market
The Spanish office real estate market is also stable throughout 2018. This deal was important only because it did not show investor confidence in the Catalan capital, it also became Spain’s largest single-asset transaction.
Overall, sales experts have noted that big-market players still tend to see Barcelona as one of the best cities in Europe for start-ups, innovation and technology. To date, more than 8,500 international organizations have settled in Catalonia. According to a PwC Emerging Trends (2019) survey on real estate, respondents (leading European investors) acknowledged that the Barcelona office market was able to surprise its stability in the wake of a political crisis. According to PwC, the yield here is from 5 percent to 5 percent.
Some of the survey participants acknowledged that in the ‘Catalan crisis’ they began visiting other Spanish regions and neighboring Portugal and its capital. Lisbon offers higher yields but offers are limited at this location. Investors are actually forced to fight for space.
Hotel real estate market
According to the Spanish Ministry of Tourism, more than 3 million foreign tourists visited the country last year. The most popular destination was Catalonia: the region accounted for more than 23 percent of the total tourist flow (20 million guests). Balearic (7.7 b percent) and the Canary Islands (১ 16.6 percent) took second and third.
In 2018, international and local investors put 4.8 billion euros on existing hotel infrastructure, new facilities and building sites. According to data obtained by Colliers International, investment in growth was 23 percent, with a major share (71 percent, 3.4 billion euros) of international traders. Representatives from North America become leaders in foreign investors in this market. They were after Europe and Asia.
In the long-running rivalry between Madrid and Barcelona, the Spanish capital became a “winner” in terms of investment volume last year. The total investment in the Madrid hotel sector was 292 million euros, and Barcelona lagged behind the euro 252 million.
Miguel Vasquez, managing director of the hotel’s department at Colliers International in Spain, believes that the ongoing political crisis and restrictions by city authorities on opening a new hotel have slowed investment activities in Barcelona. This situation has led many investors to take a standpoint.
“It might be a good idea to buy a small hotel in the city center, which will always be full, but taking a big convention hotel could be more of a story,” Vasquez shared in an interview with Hotel News Now. “Spain’s current investment environment is truly exceptional, however, the market itself is bound to improve.”
Global investors are still different in the current situation of valuation in Spain. The political turmoil surrounding the Catalan referendum alerted some players in the market, while others decided not to postpone the investment and were able to discover new opportunities.
Participants in the PwC survey believe that Spain does not have a business tendency to overdetermine the situation, and investors have partially agreed with the situation in this country.
“We know what the demand will be for political situations. We think this situation is about to be resolved quickly. In his interview to Reuters, Kirsten Jarnetzky, Country Head of Spain at AOU Europe Investment Fund said, “This is something we have to live with.”
When forecasted with real estate market development, experts warned that the sector would not last forever. According to PwC, the aggressive growth of the market will end in the second half of 2019 due to changes in ECB policy. However, after a change of trend, neither recession nor crisis can be expected.