The Spanish real estate sector closed the first quarter of the year with an investment volume of €2,876 million, 34% less than the record figure recorded in the same period of 2022 with more than €4,300 million, according to data from CBRE. In this sense, the first quarter of 2022 was the second best first quarter in history after 2018.
Despite the adjustment experienced, in accordance with the forecasts made by CBRE at the beginning of the year given the context of high volatility, the volume achieved in the first three months of the year is in line with the average of the last four years and is 37% higher than the figure for 2019, a pre-pandemic year.
Madrid and Barcelona have led investment at the start of the year, accounting for 60% of the total volume, a higher weight than in the first quarter of 2022 (52%) and not observed since 2019. By buyer profile, the activity of family offices and private investors is particularly noteworthy, accounting for 17% of the total volume transacted, a far cry from the 5% it represented in 2022 as a whole. For their part, Spanish investors lead investment with 30% of the total, followed by American (23%) and French (13%), according to CBRE data.
For Paloma Relinque, Director Capital Markets at CBRE Spain: "The volume recorded in the first three months of the year is in line with the 30% adjustment forecast we made at the beginning of the year, taking into account the high volatility expected for the year and also taking into account that the start of 2022, after the pandemic, left record investment volumes. In this first quarter, in an environment of stricter credit standards, there was a notable increase in transactions by family offices compared to institutional investors, showing that the investor profile less dependent on financing and with greater liquidity capacity has gained prominence. This is a trend that we will probably continue to see in the coming months. At the same time, large-volume and highly diversified transactions have been very important in this quarter.
According to CBRE data, in the first quarter alone there were five deals in excess of €150m in four product types (residential, offices, hotels and healthcare), while in 2022 there were 13 large deals and the average for the last four years was 10 deals per year above this amount.
Data by sector
The Living sector continues to consolidate its position as a focus for investment, accounting for 42% of total investment in the first quarter of 2023 with more than 1,219 million euros transacted. Of particular note was the corporate transaction of the JV formed between Greystar and Vía Célere, which concentrated a volume of EUR 400 million, and the purchase by DWS of Culmia's package of 1,763 homes in the Plan Vive. The boom in corporate and affordable transactions has increased the weight of PRS and BTR transactions within the Living segment. In the same period of 2022, the Living sector accounted for 25% of total investment, making it the leading asset class in terms of investment volume. In second place, compared to the fourth position it held in 2022, was the Office segment, with 19% of the investment (557 million) and where the purchase by the private investor VAPAT of the Colonial buildings stood out.
Hotels, on the other hand, registered 365 million compared to the 995 million transactions in the first quarter of 2022. The Logistics sector is in fourth place with 10% of the total investment with 293 million euros, followed by the Healthcare and Retail segments, with 240 million euros and 201 million euros respectively.
Miriam Goicoechea, Director of Research at CBRE Iberia, said: "Although the total volume achieved is in line with our forecasts, the analysis by sector shows a boom in some sectors, such as Living, and a slowdown in transactional activity in others, although for the most part there has been an increase in both large and small mid-caps. Differentiating elements such as quality, ESG and flexibility of use will mark a gap, also in rents and occupancy, between assets that incorporate them and those that do not. For the year as a whole, we maintain our forecast for full year volumes to adjust by around 30% and in line with the more pessimistic range we launched at the beginning of the year".