After two years of the pandemic, Spain began to gradually return to normal life. At the same time, the local real estate market began to gradually recover.
The latter was clearly evidenced by the first quarter of 2022, which was marked by a noticeable increase in the estimated value of real estate assets.
A real estate consulting company, CBRE, has presented a quarterly market report with results indicating that 2022 is the first year in which the logistics and housing sectors have become market leaders.
The development trends in each of the relevant sectors will be described below and market forecasts for the rest of the current year will be given.
Logistics
It is expected that this sector will experience the most pronounced increase in the value of assets in the first half of 2022. Besides, it is currently forecasted that logistics real estate assets in Madrid and Barcelona may end the year with an outstanding semi-annual revaluation rate of 10%.
In areas of the second order, such as Valencia and Zaragoza, the expected growth in the first half of 2022 will be 10% and 9%.
However, Javier Kindelan, Vice President of CBRE Spanish branch, points out: «By the end of 2022, we expect that investments in the logistics real estate sector in the amount of about 2 billion. euro, which is slightly lower than in 2021. That year was a record, and this year there is a shortage of supply in the real estate market».
Housing and land
Residential real estate rentals were one of the main driving forces of the Spanish market in 2021. The share of housing currently rented out is 24.8%. CBRE estimates that this share will grow to 27.3% by 2025. Besides, according to the company, the profitability of residential real estate in the first half of 2022 can be estimated at 11% higher than its indicators before the start of COVID-19.
With regard to land plots, it is indicated that the offer prices were not as high as expected, despite the increase in the cost of construction work. The metropolitan districts of Madrid and Barcelona adjusted the value of their land assets in 2021 and will maintain the established level in 2022. In the Cantabrian Arc, Levante and Costa del Sol, the valuation of land assets is returning to the levels that were recorded before the pandemic.
Retail and real estate
Business activity in the central shopping areas has returned to the pre-pandemic level, this is especially noticeable in the central areas in medium-sized park areas. In these places, the increase in activity was 1.6% compared to the indicators before the start of COVID-19.
At the same time, medium-sized central districts and urban centers are still far from achieving pre-pandemic activity indicators. Approximately their current levels lag behind the «doc-like» values by 19.4%.
As for the «High Streets» areas (approx. the main city street, where the main shops, banks, etc. are located), then forecasts for the end of the second quarter indicate that the value of real estate assets located on such streets in Barcelona and Madrid will increase by 2% during 2022. This will help to achieve a balance of interests of renters and landlords.
Fernando Fuente, Senior Director of Valuation and Support at CBRE Spain, reports: «If we talk about investment interest, the growing attention to premium assets in the sector has faced a shortage of supply. However, we expect that active demand from public and private funds for facilities in «High Street» areas will continue throughout 2022».