Spanish real estate leads the growth in Europe due to logistics and rental housing

Spanish real estate leads the growth in Europe due to logistics and rental housing

Every month, Spain’s real estate sector is becoming more confident and investment-oriented. According to the German bank Deutsche Hypo, specializing in real estate investment, the domestic market has been recovering for five consecutive quarters. And last summer, the British market registered the highest growth in Europe.

It is reflected in the REECOX index, which summarizes the dynamics of the real estate markets in Germany, France, Great Britain, Poland, Spain, and the Netherlands quarterly, calculating values for each of these six countries based on five variables.

In Spain, the variables are:

  • Ibex 35 Index.
  • FTSE EPRA NAREIT Spain Real Estate Index.
  • European Commission Economic Sentiment Indicator for Spain.
  • ECB interest rates.
  • Interest rates on 10-year bonds.

Based on all these variables, the real estate sector reached 186 points in the third quarter, approaching the pre-pandemic level.

According to Maria Teresa Linares Fernández, director of the Madrid branch of Deutsche Hypo, optimism has returned to the Spanish real estate market and investment has increased significantly. It is expected that by the end of 2021 this amount will be approximately €12,000.

According to Linares Fernández, demand is changing: "if earlier demand was focused on retail and offices, now there is more interest in logistics and rental housing – two sectors that survived the crisis." There is also moderate investor interest in hotel assets, which continue to grow despite the pandemic. Idealista's website alone has more than 650 properties for sale on the Spanish market, 16% more than last year.

"Logistics has proved to be the sector that has benefited most from the pandemic, owing mainly to the growth of online commerce. Spain’s share of online retail sales is significantly lower than in Europe. Now the task is to continue to create the necessary logistics infrastructure," said a representative of Deutsche Hypo.

As for the offices, the German bank emphasized "a lot of activity in Barcelona, while there is almost no offer in Madrid."

Deutsche Hypo insists that the overall failure was not as serious as expected and, although the 2019 level has not yet been reached, we are approaching it." He also stressed that real estate remained a very popular asset and that interest rates and inflation, which had been at their highest levels in many countries since the 1990s, should be kept under review in the future.

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