2014 will be remembered as the year when the market turned. Since the end of 2013 the improvement in economic forecasts increased confidence in Spain, which then resulted in greater interest from international capital. Low risk investors saw it as the ideal moment to purchase, taking advantage of the bottom of the cycle.
Offices and retail saw the greatest amount of investment accounting for a combined total of 71% of the total investment volume, which demonstrates that institutional investors, which have deeper pockets, are actively back in the market.
SOCIMIs (Spanish equivalent of REITs) were one of the main factors behind the upturn in the market, accounting for almost a third of the total investment volume and close to three quarters of domestic investment.
The excess of liquidity and the lack of product on the market that meets investors' requirements have meant that office yields have generally hardened, particularly with regard to prime yields. The strongest segments are now at similar, or lower levels than the European average.
Source : Savills