Valencia is emerging this year as one of the most attractive cities for investment in Build to Rent (BTR), just behind Madrid and Barcelona, according to a survey conducted by CBRE. In this way, 57% of respondents consider that Valencia will be the third destination by volume of investment in BTR in 2021.
The great interest of investors for this city occurs in a context of boom for the multifamily segment, which recorded in 2020 more than 2.600 million euros of investment nationally. This represents almost a third of the total volume achieved in all real estate markets. Thus, the multifamily is the first asset class with the higuest volume transacted last year, ahead of offices or logistics, according to the CBRE report «Multifamily, why is the sector booming?».
According to the study, activity in this segment is mainly concentrated in Madrid (67%) and Barcelona (17%), although in 2020 Valencia was the fourth region with the highest volume after País Vasco.
«The residential for rent will continue to be one of the main protagonists in Spain and in particular in the city of Valencia due to the lack of quality housing for rent and the increase in demand in recent years», highlights Jose Ángel Sospedra, director CBRE Levante.
Within the multifamily investment, Private Rented Sector (PRS) and Build To Rent (BTR) operations stand out. In this way, they concentrated more than 1.700 million euros, of which 1.400 million (more than double that in 2019) were invested only in BTR due to the lack of finished and rented product. In terms of BTR and PRS transactions, Valencia concentrated 4% of the total investment in both cases.
Regarding the investor profile at the national level, almost half of the volume in PRS in the last two years came mainly from institutional funds (21%), Socimis (14%) and Asset Managers (12%). In the case of the BTR, 32% of the investment corresponded to mutual funds, followed by promoters (16%) and institutional funds (14%). Due to the origin of the capital, North American funds lead both the BTR segment (23%) and PRS (48%). According to CBRE, this trend will continue in 2021.
About the profitability, «the multifamily segment presents interesting returns and lower risks for the investor. The gross yield of residential rental stands at 3,70%, significantly above the 10-year government bond (0.04%), something that has been observed since 2013», says Samuel Population, national director of residential and land of CBRE Spain.
