The forecast of economic recovery in 2014 has increased international investor confidence and Spain is now back on their radars.
The annual investment volume in the office market exceeded just over 2.5 billion Euros, which is a 12% year-onyear increase.
Overseas investors made up 80% of the total, representing a sharp increase on the 40% average registered over the past few years.
International investors came from various different locations from around the globe, but the majority were European, many of whom were regulars in the marketplace prior to the crisis. Among the most noteworthy newcomers were large Latin American wealth.
The retail segment registered the highest amount of commercial property investment. After two years with a market share of 30%, in 2013 that figure rose to close to 50%. Hotels also
improved compared to 2012.
Opportunistic funds, attracted by the the perception that market prices have bottomed out, decided to concentrate on the residential market after having ascertained that the price correction on commercial properties does not meet their expectations.
The most in demand properties in all of the sectors are prime properties, but they are also the ones in shortest supply. This situation, along with the forecast for prime property rents in the short-medium term, could drive yields to harden, although they will still remain above the European market average.
Source : Savills