This international consultancy predicts a similar investment total in 2017, bearing in mind the difficulties there will be in closing deals due to the lack of product on the market. These amounts, to the betterment of the Spanish economy, maintain an upward tendency in rents and a high degree of interest on the part of international investors in the Spanish real estate market.
The Spanish economy has experienced a standout performance in 2016, with an increase in GDP of 3.2%, far higher than the Eurozone average of 1.7%. The Spanish economy is expected to grow in the coming years, with an estimated increase in GDP of 2.5% in 2017. Internal demand will be at the head of the recovery, although at a slower pace, given certain factors which have boosted consumption, such as rising petrol prices and taxes
Rents experienced a moderate increase in 2016. Catella estimates a significant increase in office rents in 2017, especially in the prime zones of Madrid and Barcelona, where the supply of available quality real estate is scarce.
Rents in the commercial sector are feeling a strong pressure to go up, and the decrease in profitability is accentuated in secondary locations, with the consequent rise in prices in repercussion.
According to the report, given the low types of interest, the differential between State benefits and profitability from the real estate sector should remain stable at least for the next few years, taking into account the financial policy of the BCE.
Pablo Carvajal, director of Capital Markets at Catella, points out that “in 2017 investors will continue to be attracted to development and property renovation projects”. On the other hand, “some investors spend months speculating on the potential relocation of financial entities from London to Madrid, as a consequence of Brexit”, explains Thomas Beyerle, director of Research at the Grupo Catella.