Spain Property More Attractive for Investors
The number of investors viewing Spain as the most attractive market for commercial real estate purchases has increased dramatically as investor interest grows for European recovery markets.
Investor confidence for Western Europe grew compared to last year, with 71 percent of investors choosing the market as the most attractive global region for investment, according to CBRE's European Real Estate Investor Intentions
Of those surveyed, 19 percent viewed Spain as the most attractive for investments in 2014, up from 6 percent in 2013. The city of Madrid is second only to the popular London market, changing dramatically from last year. Barcelona also made the investors' top ten list.
The markets of Amsterdam and Dublin also ranked in the top 10, underscoring investor interest for recovering markets.
"The sharp increase in investor interest in Spain follows a strong proportionate rise in turnover in the Spanish investment market over the course of the past year, with sales totaling €5 billion in 2013 overall - more than double the level in 2012," Peter Damesick, Chairman, EMEA Research, CBRE, said in the report. "Resurgent investment demand in Spain reflects the easing of concerns surrounding the eurozone sovereign debt crisis and positive investor perceptions of recovery potential in the Spanish market with recently improving economic indicators."
The U.K. remained the single most attractive country for investments, chosen by 29 percent of investors. The U.K.'s economic recovery is outpacing the eurozone after gathering pace in the past year, the survey shows.
Germany ranks second with 21 percent of investor interest. While the number of investors choosing the Netherlands and Italy is much lower, both of these markets witnessed higher investor interest last year.
For investments this year, 65 percent of investors identified the most attractive types of assets outside the prime/core markets, higher than the 58 percent from last year.
Investors named the availability of stock as the number one obstacle for purchases, followed by asset pricing and competition from other investors. Only seven percent identified the ability to source debt as a potential deterrent, a significant change from the past two years.
"The gathering tempo of investment demand has itself brought fresh challenges and concerns for investors," Mr. Damesick said. Investors are finding markets to be more crowded, competitive and keenly priced; all of which is pushing some investors to target a wide range of locations and asset types beyond prime."