The last real estate capital market cycle is impacting on the structural characteristics of Italian and Spanish markets.
Italian and Spanish commercial real estate markets are often associated and grouped within the Southern Europe subregional market. Despite the many structural differences in the respective economies, the capital flows in the commercial real estate market of these two countries followed a very similar path during the real estate cycles in the early 2000's.
However, something has changed in the hierarchies of the two main Southern European markets. Chart 1 shows the quarterly investment volumes in Italy and Spain calculated on a rolling three years basis in order to have smoothed dynamics and avoid peaks due to single large transactions as such markets are relatively small and sensible to extraordinary deals. It appears quite clear that the two investment markets progressed on parallel trends until 2012, with the Italian market recording, on average, a 20% higher investment volume than Spain. However, since 2013, Spanish investment volumes have consistently exceeded those in Italy.
Source : UBS AG