BNP Paribas Real Estate has presented its latest real estate investment report, which reflects the figures for the third quarter of the year in the sector. The consultancy firm notes that, taking into account the current scenario, Spain continues to be in the sights of international and national investors. This is reflected in the volume of investment that the sector has attracted up to 1 October, with 13,100 million euros accumulated, 57% more than in the same period in 2021.
At this point, the third quarter of the year closes with a volume of investment that stands at 4,866 million euros. The two most dynamic segments were offices and alternative markets, followed by logistics, retail, hotel and residential.
BNP Paribas Real Estate reveals that expectations for the last quarter of 2022 are positive. "With three months to go before the end of the year, we have already surpassed the previous investment peak recorded in 2019. The high volatility of other variable investments, the high existing capital to invest in real estate and the existing supply in the market, makes us think that in the overall year investment may exceed the €15 billion barrier, as we anticipated at the end of the first quarter" highlights Borja Ortega, CEO of BNP Paribas Real Estate.
In this direction, the company estimates that by 2023, we may see an adjustment in investment volumes of around 15-20% from the peak levels of 2022. This is due to the financial alternatives that once again exist in the market and to the delay in the negotiations of the sale processes.
THE RETAIL SECTOR ATTRACTED THE LARGEST VOLUME OF INVESTMENT IN THE SECOND QUARTER, ACCOUNTING FOR 26% OF THE TOTAL.
Offices and alternative markets are positioned as the quarter's winning horses
If we analyse the volume of investment from the second quarter of 2020 to the third quarter of this year, the retail sector is the one that concentrated the most capital, accounting for 26% of the total. Given the increase in activity in this segment, it is worth highlighting BBVA's operation in the acquisition of 659 bank branches, which amounted to €1987 million.
If we analyse the figures for investment in the third quarter, we can see that activity in the branch sector was the highest of all, surpassing the EUR 1,100 million barrier. Specifically, this sector has managed to capture 1,183 million euros, distributed in 23 operations.
THE OFFICE SECTOR CONCENTRATED AN INVESTMENT VOLUME OF MORE THAN 1.1 BILLION EUROS
A key factor in achieving these figures, which consolidate the recovery of the sector, was the closing of three large transactions, which together accounted for 54.5% of total investment. Of particular note is the purchase of Castellana 51, in the most exclusive section of Madrid's CBD, by Inmocaixa for a value of 238.5 million euros, the purchase of Glovo's headquarters in Barcelona in the 22@ district (for approximately 220 million euros) and the purchase of BBVA's headquarters in Bilbao. If office investment is analysed geographically, Madrid once again leads the ranking as the market with the highest volume of investment and transactions, with 58% of transactions and 51% of the volume registered. Even so, the Barcelona market continues to be very attractive for investors, with seven investment transactions and more than 400 million euros in the last three months.
Activity in the alternative investment sector amounted to EUR 1,176 million, representing 24% of the total investment volume this quarter. Of note in this segment was the investment in student residences, where the largest transaction of the quarter was the purchase by the Dutch pension fund of a portfolio of 43 residences in 21 Spanish cities for EUR 900 million.
Also noteworthy was the large number of transactions signed in the senior housing segment, where an investment of EUR 130 million was recorded in the last three months. Finally, the Coliving niche is consolidating among specialised investors.
ALTERNATIVE INVESTMENTS ACCOUNTED FOR 24% OF THE THIRD QUARTER TOTAL
Quarterly activity in the logistics sector is similar to the levels of 2021
After a first half of the year in which transaction volumes had not been encouraging, the activity recorded in the third quarter of the year is similar to that of 2021, the most dynamic period in the historical series.
In the last three months, an investment volume of EUR 967 million was concentrated in 20 transactions. The most noteworthy transaction was the purchase by Prologis of a Pan-European portfolio of 128 assets for EUR 1,585 million, with a significant weighting of the portfolio in Spain of approximately 21% of the volume.
Another outstanding transaction was the sale by DWS to CBRE GI of two recently built logistics platforms located in the Corredor de Henares for approximately €90 million.
Thus, Catalonia was the market that channelled the most investment this quarter, with an approximate amount of 60 million euros, followed by Zaragoza, Malaga, Valencia and Seville.
High street dynamism in the retail segment
The retail segment continues to recover, driven by the increase in inflows and sales, which, little by little, are becoming more and more similar to pre-pandemic records.
The volume of investment has risen to 816 million euros between July and September, distributed in different typologies: shopping centres and retail parks, supermarkets, bank branches and commercial premises.
THERE ARE DEALS UNDERWAY THAT COULD PUSH RETAIL INVESTMENT TO RECORD HIGHS
In this context, the most significant transaction by volume was the sale of 380 branches of Banco Santander for EUR 297 million, together with the purchase by the French fund FREI of the Mediterráneo retail park for EUR 83 million.
This high dynamism in retail was accentuated by the High Street type, which accounted for 65% of all the transactions registered. Specifically, Madrid has been the favourite location for High Street buyers, with 82% of transactions, followed by Barcelona and Seville.
As of today, there are transactions underway in this segment that could raise retail investment to record highs, surpassing 2018, the peak of the market to date with more than €4,000 million.
The hotel sector is close to 2,000 million euros of investment in 2022
Activity in the hotel sector was similar to that recorded in the second quarter of the year, reaching 510 million euros.
The most significant transaction was the purchase of a portfolio of five hotels (1,119 rooms) located in Mallorca and Ibiza by the Israeli investment group Fattal Group for 165 million euros.
The bulk of investment activity has been geographically distributed between the Balearic Islands, Malaga, Valencia, Madrid, Barcelona and Santander. Looking at the figures since the beginning of the year, hotel investment in Spain stands at 1,768 million euros.
SINCE THE BEGINNING OF THE YEAR, HOTEL INVESTMENT IN SPAIN STANDS AT 1,768 MILLION EUROS
Residential investment volume exceeds 2020 and 2021 figure
Investment activity in the residential market in recent months has been lower than in previous quarters, with 177 million euros invested. However, the cumulative figure for the year was €1,880 million, the highest figure seen in the previous two years, equalling the highs of 2018.
The most significant transaction was the purchase of a 220-home Build to Rent project in Badalona for approximately €100 million.
