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Investor Guide to Europe 2014
Spain has the fourth largest invested stock in
Europe. activity is focussed on the two main cities
of Barcelona and Madrid. Spain’s commercial real
estate market has suffered greatly due to the
protracted economic crisis and the high levels
of debt secured against both commercial and
residential assets.
The recent transfer of underperforming loans into the bad
bank, SAREB, is helping to support renewed activity as the
economy begins to show signs of recovery. Private companies
and individuals play a large part in the real estate market.
Unlisted funds are also active investors. listed companies
have been less active since the onset of the crisis as many
have struggled with high gearing.
With the onset of the crisis and the strained Spanish economy,
many domestic investors ceased their investment activities
and foreign investors became increasingly important in the
market. Their share of the market has averaged 60% over
the last three years, double the level before the crisis. Spain is
currently attracting investors from around the globe, with the
majority of foreign investment focussed on prime office and
retail assets in Madrid and Barcelona.
In 2012 the government amended the current laws regarding
SoCIMIs (Spanish REIT equivalent), to make them more
competitive and congruent with other countries’ regimes.
Debt funding remains a significant barrier for the property
market as many banks continue to try and clean-up their
balance sheets and reduce their overall exposure to the sector.
Institutional lending is limited.
Market sizing
Spain
Europe
Invested stock*
(Total stock)
EUR 320bn
(EUR 510bn)
EUR 3,380bn
(EUR 8,150bn)
liquidity ratio*
(10y average)
0.7%
(1.9%)
4.0%
(4.5%)
2013 volumes
(10y average)
EUR 3.0bn
(EUR 5.0bn)
EUR 139bn
(EUR 135bn)
Investment activity by asset type, 2013
Source : DTZ Research
Investment activity by source of capital, 2013
Source : DTZ Research
Market pricing – Madrid (Q4 2013)
office
Retail
Industrial
Current Yield 6.00% 5.75% 8.25%
Min/Max
(10y)
4.00-6.25% 5.00-6.50% 6.00-8.25%
Yield
definition
net initial yield
Source : DTZ Research
SPaIn
* 2012 figures
