Spanish real estate comes to the fore in Europe due to the better economic situation

“Last year we were going through a storm. Now there is a little more clarity, but it is still early. We are seeing a very harsh penalty in investments, with declines of 50 percent or 60 percent, above expectations. European country. Although there are still risks, we are more optimistic“Uncertainty and concerns about inflation and interest rates,” he summarized. Rafael Pérez GuerraDuring the presentation of the report at the event where important players of the sector were present as PwC Real Estate Audit Partner

Despite weak investment data, forecasts for next year are more positive. Antonio Sánchez RecioPartner responsible for PwC’s Construction, Real Estate and Services cluster, “2024 will be difficult, but the storm will ease throughout the year“. The manager of the consulting firm was aware that this was a real estate crisis that “affects differently depending on the type of assets.”

Spain’s situationAccording to market consensus, Better than other countries in the European Union. Among other things, the average debt is healthier, prices have not risen as high in recent years, and economic growth is greater. Richard GareyThe partner responsible for the Accords at the ‘big four’ defended the country’s situation, but attributed this to several factors: “Spain is and will be in a better position “Assuming that consumption, employment, tourism and economic activity always continue, we have a higher value than other countries around us.” In the same direction, Cristina García-PeriThe senior partner at Spanish management company Azora added: “Investors perceive that Spain is not a ‘distress’ (opportunistic) market, something they see in Northern Europe where there are high leverage situations.”

Alternative assets are investors’ favorites

In the report prepared by PwC and ULI, The assets most desired by investors are:at the same time, those representing the least transaction volume. Especially, data centers (data centres), ‘coliving’, the healthcare sector (‘health’) or care and student residences are favorite types of investments, but they barely register operations. On the other hand, office buildings located in city centers or outside cities are the least sought-after but still the most traded assets.

Cristina García-Peri He highlighted the trend towards specialization in the sector: “Previously, real estate was something where an investor bought an asset and rented it for 10 or 15 years. This model may still be valid, but less so.” Alternative assets are going much further and are the assets investors look at most. “We are also better prepared for some of these typologies, such as all existing housing formulas or data centres, in the case of Spain.”

David MartinezThe CEO of developer Aedas Homes has defended the role of the new construction housing sector in Spain. In his statement in English, he assured that every investor who wants to invest in this market in Europe should also consider our country: “No Spain, no profit” (Translation: No Spain, no victory). The manager of the biggest promoter in the country admitted in recent months: There was a decrease in salesHowever, he stated that the imbalance between supply and demand “will continue in the coming years”, which ensures that they have a job in selling new homes.

For your part, Miguel CasasStoneweg’s managing director assessed the state of the hotel market, a sector in which the Spanish-Swiss manager is currently investing: “Buyer and seller still have different expectations regarding the price to be paid for the hotel.. The selling side still needs to make an adjustment.” The manager underlined that there is more correction in Spain than in neighboring countries such as Portugal or Italy. In the same direction, Cristina García-Peri also sees different expectations: “We continue, I see the difference in the selling and purchasing price.” .

The Azora partner also analyzed the situation experienced by other assets, such as those related to commercial activity or offices: “We are seeing a correction in the value of assets in the logistics sector, which is even greater in offices. ‘retail’ (commercial assets) had already corrected, but they are registering declines again. There are very cheap assets that no one will buy because they have little future and little liquidity.. “This is not the case in logistics, but it is the case in some offices and retail that will never regain their value.”

Madrid is Europe’s third favorite city

In the ranking prepared annually by PwC and ULI, in 2023, Madrid is positioned as the third favorite city by investors only Behind London and Paris. “London and Paris are excellent investment cities for capital seeking capital and being selective in a world of fewer transactions. London offers liquidity and market depth and there have already been rapid price adjustments. Paris is the same, with the addition of the Tourist factor and the future celebration of the Olympic Games.” This year German cities are burdened by the macroeconomic situation, which has a less dynamic market and valuations still do not reflect the market today,” says Richard Garey.

PwC manager explained the reason for Madrid’s rise: “This is a the city is open to tourism, immigrants and tourismWith first-class infrastructure, reasonable growth, favorable political environment and stability.” On the other hand, she also stated what could hinder Barcelona in this regard: “The Catalan capital is losing its appeal with Milan or Lisbon due to the political situation and the current legislation on the rental market.” Cristina García-Peri added in the same vein: “Barcelona has a housing problem if it is not resolved they will not attract capital. “We must also put on the table that cities such as Malaga, Valencia, Alicante or Bilbao are very attractive places for niche or alternative assets.”