Forecasts are optimistic for the Spanish real estate sector. Investment in this sector in Spain will rebound by 32% this year, reaching 11,500 million euros and returning to pre-pandemic levels, according to the ‘Real Estate Investment & Financing Keys’ report carried out by Deloitte. Respondents say that vaccination and herd immunity will be the keys to recovery.
Investment in Spanish real estate in 2020 fell by 52% to 8700 million euros. The biggest decline was in hotels, where investment was cut by 62%, followed by offices, the segment that accumulates the most investment, but which recorded a fall of 49%. Not even the boom in e-commerce made logistics stand out, as it reduced its investment by 26%. Retail, one of the segments hardest hit by the pandemic, ended the year with a 23% drop.
In Spain, all types of investors reduced their investment in 2020. Institutional investors and socimis reduced their activity in real estate the most, with a 79% drop. Cross-border investment contracted by 43%, while private investment fell by 38%. By asset type, the players preferred safe investments and core+ and core assets recorded an investment increase of 8% and 6%, respectively. Value add investments contracted by 14%.
Beyond the fall in investment volume, the pandemic has left structural changes in the Spanish market. The uncertainty caused by the drop in office take-up may jeopardise investment volumes, especially in secondary areas. In retail, changes in consumer behaviour and the penetration of e-commerce will have an impact on the design of both shopping centres and high street hubs.
Logistics is experiencing its sweetest moment with the increase in demand caused by the e-commerce boom, although logistics centres will have to adapt and build specialised facilities for online commerce.
Considering the new scenario after the coronavirus, Deloitte points to value-add assets such as data centres, build-to-rent, logistics and resorts, along with more mature assets such as logistics and residential, as the segments that will recover the fastest.
