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The Spanish real estate market will attract more than 9.2 billion investment in 2021


The segments that will be most strengthened will be logistics, offices and alternative assets such as student residences and retirement homes. Hotels and supermarkets will also increase their volumes, following the trend of the second half of 2020.

This year closed with a notable volume of 7,800 million euros, supported by a very active first quarter and despite the lower economic activity driven by the pandemic. However, compared to 2019, the fall in the volume of real estate investment was 35%. At the end of 2019, Cushman & Wakefield had already predicted a reduction of around 15%, in response to the lower economic growth and the scarcity of product due to the high level of investment activity in 2017-2019. In this sense, it can be said that the capital market cycle itself explains one third of the fall and the pandemic the remaining two thirds. In any case, the volumes in 2020 are higher than in any year of the previous crisis between 2009 and 2013.

The sector has focused on the core and core+ markets, which are more stable and with less price adjustment, seeing fewer operations in the value add sector, where the gaps between the expectations of buyers and sellers are wider. The opportunistic market has been practically non-existent.

Investor Profile

The profile of the investor is predominantly international and, in spite of the lower activity, the proportion of foreign capital has been two-thirds, the same proportion as in 2015-2019, proof that there is still a high level of activity. The highest volume shares have been for offices (28%) and retail (27%) although with a growing boom in logistics. The former have focused on assets in Madrid and Barcelona. Prime returns for branches in these capitals remained constant throughout the pandemic (3.25% and 3.5%, respectively), indicating that investors see the product with the best quality and location as a refuge and perceive that demand remains strong given the new ways of working. Retailing has been supported by a couple of 'megadeals' (Puerto Venecia CC - 475M euros and Parque Principado CC - 291M euros), both advised by C&W and sale & leaseback operations in supermarket assets, although prime returns in shopping centres close the year at 5.25%, 0.25 points above the 2019 close. 


Logistics has been the asset that investors have sought most during 2020, thanks to the demand for space for distribution has been strengthened by the consolidation of e-commerce during the pandemic. In this sense, logistics assets have been the only ones to see their returns reduced during 2020 and will close the year with a 'prime' profitability reference of 4.75%, 0.25 points lower than a year ago. The absorption of logistics space will be higher in 2020 than in 2019 in Madrid, with an increase of nearly 20%.

"The sector has been strongly driven by the e-commerce boom during the pandemic and, in addition, institutional investors have raised capital and appetite enough to invest in Spain and continue the good momentum experienced by the sector over the coming years," explains Oriol Barrachina, CEO of Cushman & Wakefield in Spain.

The professionalisation of the logistics asset (in marketing, management and investment), has led institutional investors to prefer this asset in 2020 and reach a 12% share (17% in 2019). This contrasts with what was observed 10 or 12 years ago when the share was between 3% and 6%.


The same path is being followed by residential investment and the development of rental housing. In both 2019 and 2020 residential investment has accumulated significant shares of 20% of the total investment volume, which contrasts sharply with its 6% share in 2007-2018. As the sector becomes more professional, the potential of this market will grow, following the European trend from 2015 onwards. The residential rental market has grown in Spain in recent years, changing the ratio of households living in this format to property. Thus, in 2013, 15% of Spanish households were living in rented accommodation, while in 2019 the proportion was 18%, according to the INE.

Student Accommodation

There has been less activity in the area of alternative real estate assets in 2020, although institutional investors are still interested and able to spend on this type of asset. The lack of quality supply in Spain of student residences has led operators and developers to practically build this park during 2017-2019. Thus, in 2021-2023 we will see these assets entering the capital market and a good response from the investment demand. We expect their investment volume to reach 300 million euros in 2021, doubling the figure for 2020 and taking advantage of a more normalised market due to the control of the pandemic.


The average investment volume 2015-2019 in hotel investment was 1,550 million euros compared to almost one billion in 2020. This reflects the fact that, despite the near paralysis of the sector, investors are discounting their recovery and urban hotels, mainly, have been the target of investors. A return to the long term average is expected with the normalisation of activity in 2021 and 2022, with our country remaining on the radar of international capitals and hotel chains.


For its part, bank financing has been more restrictive in 2020 and bank credit has rapidly decelerated at the end of the first half of the year. This has boosted other sources of financing such as forward fundings, a mechanism in which the investor advances funds to the developer for construction, facilitating some investment operations, liquidity, appetite and interest in the Spanish market.



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