The novelty of 2022 was the expansion of the institutional investment map in the Spanish market. Savills data indicates an opening in terms of places preferred by investors. The main markets of Madrid and Catalonia account for 69% of the volume and 54% of the assets contracted in the country, respectively, but there is an increase in logistics investments in provinces such as Valencia, Seville, Vizcaya and Zaragoza, which have not been prolific in this sector so far, as well as in more decentralized areas such as Burgos and Galicia.
The constant increase in interest rates by the European Central Bank (ECB) has made financing more expensive, which has led to an increase in the level of profitability, which has increased by another 50 bps (75 bps since the beginning of the year). The yield in Spain at the end of the third quarter was 4.75% in primary assets and 5.75% in the secondary market. The largest volume of investments came from international capital: 52% from the USA and 16% from Singapore, taking advantage of the strengthening of the dollar against the euro.
Looking ahead, Antonio Montero, executive director of the Industrial logistics department at Savills, says that «the Spanish logistics market in 2023 will continue to occupy a favorite place in Europe for investors, provided that price adjustments are carried out promptly».
Madrid signed 69 deals for logistics premises, and the volume of the new offer was 40% lower than initial forecasts.
According to the latest available takeover data, more than 817,000 sq.m. were contracted in Madrid between January and October and 69 deals for the sale of logistics space were signed. Based on these figures and the size of some transactions concluded in the last quarter, the year-end results exceed one million square meters, which, according to Savills, is a record figure for the last year.
The estimated volume of new supply for 2022 in Madrid decreased by 40% during the year compared to forecasts at the beginning of the year, when it was assumed that about 900,000 sq. m. would be built.
This adjustment is mainly related to decisions to postpone the development of projects due to delays in the supply of construction materials and rising costs, which led to a significant increase in the forecast of new supply for 2023 and 2024. According to the consulting company, new projects registered before the end of September increased the volume of supply to 11.9 million square meters, and availability in the region is 6.4%.
In this context, rents in prime areas showed a slight increase of 2%, and the average closing rent registered an increase of 5.3% year-on-year until October.