Eight trends that will mark the real estate sector in Spain in 2018

10/02/2018

This 2018 can be optimistic about the prospects for growth in the real estate sector, which will be boosted by the lack of investment alternatives and enormous liquidity.
These are the eight trends that make the real estate consultant:

1. The logistics market will continue to lead

The logistics market will register the largest growth in the real estate sector in 2018, mainly due to the boost of electronic commerce, with annual growth of 25% and a market share of 41%. The lack of available quality offer has caused many developers to decide to buy industrial land to develop new projects that include innovation in logistics parameters and in the sustainability of materials. LED lighting is revolutionizing this sector and will allow companies significant savings in consumption.

2. Good retail profitability will be maintained

The investment in the retail segment will remain this year in figures similar to those of the previous year (over 4,000 million euros), supported by positive forecasts of GDP growth, job creation, increased consumption and appetite investor before the good returns that will continue offering these assets.

3. Towards concentration in the residential sector

In 2018 we will continue to attend mergers between promoters, sale of companies to funds and more IPOs. In addition, the figure of the local developer resurfaced with the purchase of lots throughout the national territory. The shortage of land will increase its price and, consequently, also that of new construction. By province, some provincial capitals will be placed in the crosshairs of investors, thus joining other consolidated areas such as Madrid, Barcelona, ​​the Balearic Islands and the Costa de Sol.

4. More demand for quality offices

The investment in the office sector in Spain will continue to show its strength throughout this year, where it will reach a total investment volume similar to that of 2017, in the vicinity of 2,500 million euros. Investors will maintain their commitment to this sector due to the growing demand for quality office space, which is favoring the gradual growth of rents, particularly in the CBD. Regarding the type of investors, the profile "value-add and Core +" will have a greater role and will increase the number of investors who can consider buying land to develop new office projects. Investors with a more conservative profile (insurers, core funds, mutuals, etc.) will have more difficulties in complying with their ambitious investment plans, mainly due to the scarcity of prime opportunities.

5. New ways of working

The upward cycle will continue in the office segment, both at absorption levels and in the growth of rents. Despite the positive macroeconomic data for the office sector, the demand for office space will not reach the levels of 2007 due to new ways of working, with a significant reduction in the ratio of m2 per job, and because of the situation of the market based on contractual renegotiations. While this trend is running out due to the growth of rents in different areas of our market.

6. Rotation in international funds and SOCIMI

On the sales side, the market will maintain its dynamism with international funds and SOCIMI, which will enter a period of asset rotation after keeping them in their portfolios for the minimum period necessary to obtain the tax advantages of these vehicles. . The new actors will contribute new resources and knowledge to maximize the value of the development and management activities

7. Renewed interest in medium-sized parks

There is a clear trend towards the purchase of commercial land, by investors with a promoter profile, for the development of medium-sized parks, after years of interruption due to the crisis in this sector. In addition, shopping centers will remain the type of asset most demanded by investors, although other products such as portfolios of hypermarkets, supermarkets or bank branches and medium-sized areas will see increased interest by a certain type of investor. The returns will remain at 2017 levels (6 - 6.5% in medium-sized parks, 5 - 5.5% for prime shopping centers or 3% for prime locations "High Street").

8. Selling opportunity for family hotel groups

The hotel segment will remain fashionable in a scenario of strong appetite for investors in Spain, the second largest tourist destination in the world (82 million visitors in 2017). The strong buying pressure of investors, given the liquidity of the capital markets, will motivate the owners of hotel assets, especially medium-sized hotel groups.