BNP Paribas Real Estate has released its real estate investment report for the first quarter of the year, showing a total investment of €2.214 billion, with the retail sector leading the way, accounting for 38% of total investment. This volume of real estate investment reflects a 14% adjustment compared to the same period in 2023 and remains consistent with the figures for the previous quarter.
Investors, during this initial period of 2024, have shown a focus geared towards increasing rents and efficiency in the management of their properties in order to improve yields. They have also initiated significant transactions, especially in the retail and logistics sectors, highlighting the growing presence of key investors in the market.
In the words of Borja Ortega, CEO of BNP Paribas Real Estate in Spain: “In an economic context of relative calm in Europe, cautious optimism prevails. Inflation is falling considerably, paving the way for cuts in official interest rates at the end of the year that could facilitate market reactivation. After leaving behind a complicated year 2023, we are entering a challenging 2024 period, to say the least. A slow and controlled market recovery is expected during the first six months of the year, with a more pronounced recovery in the second half of the year".
The retail sector has emerged as the main protagonist of the quarter, accumulating an investment of 832 million euros, representing 38% of the total invested. Within this sector, shopping centers stood out in particular, contributing more than 55% of retail investment. This has enabled the sector to double the investment levels of the previous quarter and to multiply investment by 3.5 times compared to the same period in 2023.
The residential sector has achieved a market share of 19%, with an investment of 421.5 million euros. This amount represents an increase of 48% compared to the previous quarter. Strong demand, continued rental growth and limited supply have maintained the attractiveness of the residential sector for investors in Spain. Of particular note are the cities of Madrid, Barcelona and Valencia, which in the European context offer positive prospects for growth in rents and capital values over the next three years, with Madrid leading as the most attractive market for investment in Europe.
The hotel sector attracted investment of 356 million euros during the first quarter, marking a 10% increase over the previous quarter. The Canary Islands, Catalonia and the Balearic Islands accounted for most of this investment.
Investment in the office sector amounted to 210 million euros, reflecting an adjustment of 61% compared to the beginning of 2023. This activity was mainly centered in Madrid and Barcelona.
The logistics sector, with an investment of €283 million, experienced an increase of 15% over the same period of the previous year, indicating a rapprochement in expectations between institutional sellers and buyers.
In terms of investor profiles, Institutional Funds were the most active in the first quarter, investing approximately €1.09 billion, accounting for 49% of total investment. Private Wealth Management (Family Office) reached a market share of 17% of total investments and 32% in terms of the number of transactions. Real Estate Companies and Socimis invested a total of 484 million euros, representing 22% of the total investment volume for the quarter.
