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Covid 19: market’s investment appetite remains latent
14 April 2020 |

The Covid-19 pandemic’s impact has been obvious. Transactions have been postponed and now is not the time to take decisions before so many uncertainties. But one thing is sure: investment appetite is latent, assures Jorge Sena, Partner, Head of Commercial at Knight Frank.


This is the scenario shown by the data from the last few months. Both real estate occupancy and investment suffered a «clear deceleration», revealed the Head of Commercial at Knight Frank. Nevertheless, there are several scenarios which are being analysed, «hoping to get a get a clearer idea of the market’s conditions when activity restarts», he continued.

According to the consultant, the year’s first three months saw around 950 million euro being invested in the office segment. Of these, around 550 million euro were invested in Madrid and around 260 million euro in Barcelona. Despite the decrease when compared to 2019, Knight Frank recalls that we must take into account the fact that 2019 was a historical year in terms of office investment (with 1.300 million euro invested during the first quarter), whereas the average for the first quarter during the last five years was of around 700 million euro.

Despite the current situation caused by the COVID-19 pandemic, there continues to be great liquidity in the market. Right now, «there are many frozen operations which should restart in the coming months and an important amount of capital waiting to be invested. The office segment continues to offer yields which are very hard to obtain in non-real estate investments», explained Pedro Luengo, Offices Capital Markets Manager at Knight Frank.

On the types of investment, Pedro Luengo considers that this is «a good moment for Core funds seeking buildings in good locations and secure rental contracts, but we consider that added value investors may take longer to come back to the investment market, waiting for one or two quarters more».