While Barcelona and Madrid continue to be the preferred destinations for most investors, Valencia is emerging this year as one of the most attractive cities for ‘build to rent’ (BTR) investment, according to CBRE. Thus, 57% of those surveyed believe that Valencia will be the third most attractive destination for BTR investment in 2021.
The great interest of investors in the city of Valencia comes in a context of rising interest in the multifamily segment (residential rental and student housing), after registering more than 2,600 million euros of investment at national level in 2020. That is, almost a third of the total volume achieved in all real estate segments. According to the study, multifamily activity is concentrated mainly in Madrid (67%) and Barcelona (17%), although Valencia was the fourth region with the highest volume in 2020, behind the Basque Country.
Jose Ángel Sospedra, Director of CBRE Levante, highlights “the attractiveness of Valencia for investment in multifamily and specifically in BTR” and indicates that by 2021, “rental residential will continue to be one of the major players in Spain and in particular in the city of Valencia due to the lack of quality rental housing and the increase in demand in recent years”.
Samuel Población, National Director of Residential and Land at CBRE Spain, points out that “residential rental is one of the most resilient segments at present and one that is arousing most interest among investors, as evidenced by the volume of investment achieved in 2020, which makes it the favourite asset class for investors”.
According to the data at national level, within multifamily investment, Private Rented Sector (PRS) and Build To Rent (BTR) operations stand out, which concentrated more than €1.7 billion, of which €1.4 billion (more than double that in 2019) were invested in BTR alone due to the lack of finished and rented product. In terms of BTR and PRS operations, Valencia accounted for 4% of the total investment in both cases.
Sospedra adds that “at a national level, this segment is at an incipient stage compared to the rest of the European countries, so there is a great potential for growth, especially in the city of Valencia, which will be supported by a forecast of increasing demand and a high level of interest in this product from institutional investors”.
Regarding the investor profile at national level, almost half of the volume in PRS in the last two years came mainly from institutional funds (21%), Socimis (14%) and Asset Managers (12%), while in the BTR 32% of the investment corresponded to investment funds, followed by developers (16%) and institutional funds (14%). By source of capital, North American funds lead both the BTR segment (23%) and PRS (48%) and according to CBRE, this trend will continue in 2021.