Signs of life are returning to the Spanish real estate market.
Investment in the country’s hotels, warehouses, offices and malls is poised to reach its highest levels since 2007, right before the global economic crisis plunged Spain’s economy into the worst slump in its democratic history, according to Bloomberg.
The turnaround is partly due to banks getting rid of foreclosed assets and selling foreign buyers on cheap properties. For instance, Banco Bilbao Vizcaya Argentaria SA, the second largest bank in Spain, made a deal last month to sell foreclosed property assets worth 13 billion euros to Cerberus Capital Management.
Investment in the country’s commercial properties should reach 8.9 billion euros by the end of 2017, coming close to the 2007 pre-crisis level of 10.8 billion euros. The most popular investment this year has been retail assets, followed by hotels and offices.
Spain’s overall economy is forecast to grow 3.1 percent this year and 2.5 percent next year, and unemployment in the country is at a nine-year low.
Ismael Clemente, CEO of the Madrid-based REIT Merlin Properties Socimi SA, told Bloomberg that 2017 was “the year when it’s all come together. The Spanish economy is doing well, its banks are healthy, there’s a very investor-friendly legal framework and property is still cheap compared to other European cities.” [Bloomberg] – Eddie Small