IP03

36 // iberian.propery / 2017

sources: JLL, CBRE, Aguirre Newman and Cushman & Wakefield

The Madrid Region

receives one out

of every two euros

invested by the

insurance sector

in real estate

purchases in Spain.

INVESTMENT

OFFICES | More than 500 million invested until June:

Madrid continues to lead investment demand for office assets,

concentrating approximately half of the 1.05 billion euros allocated

to this asset class in the 1st semester. Over recent years, the

capital’s market has maintained an average share of 70% of the

investment in offices in Spain.

Yields have remained stable since the beginning of the year (5.75%

Prime Yield), and this indicator is not expected to compress further

on the prime axis or CBD (CDN & RDN), where it is currently at

record lows. However, yields in the peripheral zones (DEC & OUT)

may still undergo additional adjustments, sustained by the notable

rise in take-up and rents.

HOTELS| 27.1% of the total volume invested in the country

Last year, Madrid reached a record value of investment in hotels,

with 614 million euros, in other words, the equivalent of 27.1% of

the national total. Altogether, 20 assets were traded, totalling 2.599

rooms, including in these results hotels and other buildings for

conversion into hotels.

Regarding product typology, the four star segment predominated

in 2016, with 1.286 rooms, followed by five and three star products,

with 586 and 524 rooms sold, respectively.

Standing as the principal destination for investment in hotel

assets in Spain, in 2016 Madrid also reached a new record

regarding the price for a single asset, with the sale of the Hotel

Vila Magna for 180 million euros. We note that 57% of the value

invested in Madrid, the equivalent of 325.57 million euros, was for

the purchase of single assets; the remaining 252.43 million were

invested to purchase portfolios.

SOCIMIs and international investment funds were the most active

players in the acquisition of hotel assets in Madrid.

High street retail among the most profitable sectors

The high street shop continues to stand as one of the most

profitable assets for investors who want to participate in the

property market, with assets located in the prime zone of Madrid

offering gross profits between 4.5 and 6%.