The international real estate consultancy firm JLL has released its advanced real estate investment data for the third quarter of 2022 and the cumulative figures for the first nine months of the year.
Thus, for the office, logistics and retail sectors as a whole (Commercial Real Estate, CRE), the consultancy firm estimates that between July and September it will reach 2,000 million euros, 49% above the figure recorded in the same quarter of 2021. In the cumulative nine-month period, investment in CRE has recorded transactions totalling €7.5 billion (+80% more than in 2021 and +33% if the portfolio acquired by BBVA from Merlin is not taken into account).
In the quarterly comparison, investment in CRE in the third quarter of 2022 would have fallen by 45% compared to the second quarter. Excluding the BBVA-Merlin transaction, there would have been an increase of 22% between the second and third quarter.
Investment in the Living segment (which includes multifamily assets, student residences and healthcare) between July and September amounted to EUR 1,100 million (+42% vs. the third quarter of 2021 and +7% vs. the second quarter of 2022). Cumulatively for the first nine months of 2022, investment in Living reached €3.3 billion, 28% higher than during the first nine months of 2021.
Commercial Real Estate
The Spanish logistics investment market has continued to grow, despite uncertain economic conditions and upward pressure on prime yields. Between July and September, according to advance data from the end of Q3 2022 analysed by JLL, the volume transacted was around EUR 610 million (+113% vs. Q3 2021 and +76% vs. Q2 2022).
For the cumulative first nine months of 2022, the logistics investment volume (excluding land transactions) was around €2 billion (+9% versus the same period in 2021), a record high, 90% higher than the average volume invested in the logistics sector in the first nine months of the last five years (2017-2021).
In terms of the profile of assets transacted, Core+ led investment in the first nine months of 2022, accounting for 50% of total transactions. Investment funds accounted for 70% of investment. According to the origin of the capital, international capital led logistics investment with 97% of the total volume.
Retail investment between July and September 2022 amounted to around EUR 550 million, +134% vs. the third quarter of 2021 and +27% vs. the second quarter of 2022 (excluding the Merlin transaction). For the first nine months of the year, retail investment amounted to EUR 3,690 million (+427% vs. 2021), boosted by BBVA's purchase of Merlin's portfolio in the second quarter. Excluding this transaction, which may distort the comparison, retail investment amounted to EUR 1.7 billion, an increase of +143% year-to-date (vs. 2021) and +70% compared to the total volume transacted in 2021.
Although the investment market is facing new headwinds such as inflation, rising interest rates and the Ukraine war, there is a significant amount of liquidity in the market and appetite for Retail has continued to increase in the third quarter.
By sub-sectors, between January and September 2022, high street concentrated EUR 820 million (+216% vs. 2021), EUR 2,807 million including the BBVA/Merlin deal (+980% vs. 2021). In the third quarter, EUR 430 million (+60%) were invested in high streets in Spain. Around EUR 350 million (+1,106% vs. 2021) were invested in shopping centres during the first nine months of 2022. The supermarket segment has invested EUR 322 million between January and September 2022 (+14% year-on-year). Retail parks recorded investments of €208 million (+69% versus 2021) for the first nine months of 2022.
According to data from the international real estate consultancy JLL, between January and September 2022, total real estate investment in the office sector in Madrid and Barcelona reached €2,040 million (+25% versus 2021), of which €940 million corresponds to the third quarter (+50% versus the second quarter of 2022 and +15% versus the third quarter of 2021). In the year to date, office investment in Madrid reached EUR 1,210 million and in Barcelona EUR 834 million (+207% and minus 33% vs. 2021, respectively). The decrease in Barcelona responds to the cautiousness with which the year began, a trend that has rebounded in the third quarter registering 465 million euros (+61% compared to the second quarter of this year).
Living
During the third quarter of 2022, JLL estimates the volume of residential rental investment (PRS/BTR) to be around EUR 200 million (-60% versus the same quarter of 2021 and -76% compared to the previous quarter of 2022). Thus, for the cumulative first nine months, €2 billion would have been invested in the Multifamily sector, exceeding the figures recorded for the first nine months of 2021 by 19%.
Between July and September 2022, the volume of investment in retirement homes will be around €65 million, 51% less than in the second quarter of this year and -56% less than in the third quarter of 2021. For the nine-month cumulative period, investment in nursing homes totalled almost EUR 300 million (-41% vs. 2021).
With a total volume of around €850 million between July and September 2022, the student residences sector recorded a quarterly investment record in Spain. This figure corresponds to a single transaction, the acquisition of RESA by the Dutch pension fund PGGM. With a total of 11,200 beds in 43 halls of residence, three of which are under development, spread over 21 cities, Resa is the largest student residence platform in Spain. This transaction brings the cumulative amount between January and September to almost €1.3 billion (+237% vs. 2021).
