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Most office investment remains on standby in Spain
28 April 2020 |

Around 86% of office real estate operations on the Spanish market remain on standby until the situation is stabilised.


The numbers are from consultant Savills Aguirre Newman which identified, until the 14th of March, the first day of the state of emergency in the country, around 60 operations in Madrid and Barcelona which, in total, reached 4.000 million euro.

Right now, according to the consultant, only 14% of those operations, which represent around 10% of the investment volume (435 million euro) were cancelled due to the COVID-19 crisis. 33% of the operations continue its concluding processes and of the almost 53% remaining operations, which represent most transactions, 21% were postponed and 32% are on standby waiting for the end of the confinement period.

Nevertheless, Savills Aguirre Newman does not predict distresses or price discounts due to the market’s high liquidity, the assets low leverage and the low-interest rates. On the other hand, the volatility concerning other investment alternatives will attract even more liquidity to the real estate market which is seen as a safe haven.

Hipólito Sánchez, director of the office department at Savills Aguirre Newman, explained that «the office segment is very resilient and defensive within the real estate market, based on excellent fundamentals such as the low offer available or rent averages around 20-25% below last cycle’s peak values, which will make them less impacted by the crisis».

Last year, the office segment registered its best record of the decade by reaching 4.314 million euro. «For 2020 the office segment will remain as the main tertiary investment market, since we expect an upturn in terms of activity during the year’s second semester, especially within the core+ operations», predicted Hipólito Sánchez.