Real estate investment in Spain reached record levels in 2022. According to the "Real Estate Investment Report for 2022" prepared by Catella, the total volume of investments in Spanish real estate was about 16.4 billion euros, which is 30% more than a year earlier. When considering corporate transactions, the volume will increase to 17.5 billion euros.
The report also shows that investor activity in the market has slowed down since the summer of 2022 anticipating the trend that the market will see in the first half of 2023. Asset yields are rising for all asset types, but uncertainty is forcing investors to wait rather than invest.
As for the types of assets, housing has become one of the most popular types of real estate for investment. It received 3.1 billion euros of investments, 60% of which were reserved for financing development projects for rent. However, residential real estate is not a record holder.
In 2022, it has two key competitors such as the hotel sector and retail. Real estate raised 3.9 billion euros for the latter, and the main deal was BBVA’s purchase of 659 bank branches and three office buildings for 1.9 billion euros from Merlin Properties. The hotel sector attracted 2.4 billion euros last year, but when considering corporate transactions between GIC and Sancus, the figure will reach 3.3 billion euros.
The office sector also distinguished itself. Last year, 2.8 billion euros were invested in it. It remains a strategically important real estate sector for Spain and draws the attention of major international investors. This demand is mainly focused on properties with high ESG standards because they have the perfect level of security and liquidity.
Logistics assets lag behind all of the above, but showed significant growth last year. Real estate in this sector has a chance to become the main ones on the market, as the number of attracted investments reached 2.25 billion euros in 2022.
Finally, there is an interest in "alternative assets". The volume of investments reached 1.95 billion euros, which is almost twice as much as it was in 2021. These are less mainstream assets, such as student dormitories, coliving and coworking spaces, social and healthcare properties, for example, nursing homes.
Carlos Lopez, CEO of Catella Spain, concludes that 2022 has not only reached a record investment level, but has also become the end of this cycle in the market. The Spanish market has attracted as much investment as it could afford, and this peak was bound to be followed by a recession. The decline began in the second half of last year. Carlos Lopez expects the beginning of 2023 to be characterized by high uncertainty and increased volatility.