With a fresh economic perspective, the Spain Real Estate Summit kicked-off by the hand of Juan María Nin, Chairman of the ‘Circulo de Empresarios’, who addressed how Europe is suffering the consequences of buying time through monetary and fiscal policy. Nonetheless, in his view inflation might be gone before than expected.
The political fragmentation and a possible debt increase can lead to fragility and weakness of the Euro coin, specifically in respect to the dollar. But optimism prevails since structurally the Spanish economy is well adapted to face these shocks. The country current main concerns should be to boost productivity, correct unemployment, strengthen sustainability of public accounts, and of course reduce imbalance between supply and demand in the housing market.
Spain Real Estate Summit 2024, Madrid
2024 the year of improvement, and hopefully 2025 a year of increased growth.
Taking place at La Finca the UZalacaín space, the 2-day conference was organised in collaboration with CBRE and JLL. Through the direct participation of the consultant’s Spanish CEOs, Adolfo Ramírez-Escudero and Enrique Losantos, the discussion of the current and future dynamics of the real estate market in Spain provided insights on 4 main blocks: Market, Sustainability, Technology, and Talent.
We are facing new times, Hospitality and fluid interaction are overlapping to several sectors, and trends of pay-per-service and pay on-the-go are dictating a new rhythm of investment. According to the experts, institutional and more conservative capital will soon understand that assets need a more active management and that the model of collecting rents having almost no relation with the tenants is disappearing.
There is plenty of liquidity for financing of the right asset classes
By bringing together opinion leaders, economic experts and investors, this event fostered collective reflection and the identification of innovative solutions to market challenges. To comment on one of the current hot topics, representatives from Apollo, Carlyle and Santander covered the fundamentals of both debt and equity.
Some of the main conclusions from their discussion were that valuations indicators and cap rates seem to indicate that repricing is behind us, and that the banking industry is reacting - doing new origination, but also taking care of legacy “books”, for which the increase of leverage provision is a priority.
AI is changing the world, and Real Estate is a sector than can easily improve profitability by using it
The first day also brought some disruptive ideas on the Artificial Intelligence impact for the industry. Software and technological companies are including its Generative AI experience to develop financial models and feature main data to produce reports on property management and asset management. Clearly focused on offering solutions to improve profitability, these companies are slowly approaching the real estate sector, although they admit the conservative profile, lack of regulation and ethical factors can constrain the velocity of implementation.
IBERIAN PROPERTY INVESTMENT AWARDS 2024 - GALA CEREMONY
And because the sector also deserves to celebrate and enjoy some relaxed networking time, the Iberian Property Investment Awards ceremony were the perfect moment to wrap-up the night. With a total of 8 categories, leading companies from both Spain and Portugal were recognized for their outstanding activity during 2023. You can get to know the Winning projects HERE.
An equally exciting second day!
After a warm welcome coffee, international and local investors were ready to continue to learn and share their views on the Spanish market. Assets Transitioning was the first topic of the morning under discussion, and the representatives from Schroders, H.I.G Real Estate Funds, and Azora agreed that transitioning represents an efficient way to explore assets through optimal use according to each market cycle.
Furthermore, transitioning not only responds to the sustainability criteria and demand of tenants, but it is also a viable mean to obtain the adequate returns over capital, while transforming the cities landscape. Challenges exist, but the room was happy to hear that the existing opportunities do compensate them.
Key issues for data centers, retail, hotels and logistics.
Spread in 4 simultaneous breakout sessions, the Spain Real Estate Summit featured an intimate moment to overlook the fundamentals of specific subsectors. The sessions were coordinated by Merlin Properties, Grupo Lar, CBRE, and JLL.
International voices debated the challenges of providing a place to live for everyone
Affordability is key given the figures of how much people are spending in housing, and most important the current imbalance between demand and supply.
Orion Capital Managers, Ares Management, Greystar, and AEDAS Homes had the hard task of sharing solutions to a central pain point of Spain. Living was positioned as an important point of Foreign Direct Investment attractiveness, and as way to rank cities and boost local economies, meaning private and public entities can both gain from a coordinated process.
The intervention of the regional government of Madrid was highlighted by the investors as a positive and effective measure. Over the next 2 years Plan VIVE is going to deliver 6,000 affordable housing units to the Community of Madrid, which represents a 20% increase in annual supply.
40 Speakers, 10 high-quality sessions, and a lot of ideas to take home!
Iberian Property extends its warm appreciation to all participants who were able to join us, and to all the supporting entities who saw the Spain Real Estate Summit as the right platform to promote a key event to both our economy and our lives.
They are: CBRE Spain, JLL Spain, Sonae Sierra, Constructora San José, Lar España, Merlin Properties, AEDAS Homes, Azora, Nhood, Square Asset Management, Clifford Chance, and Real Asset Media.