‘We have seen many deals being stopped in the last quarter of 2017 because of the political crisis,’ said Nicole Lux, director, AF Advisory. ‘Investors are more cautious and hesitant, many are worried and even scared. I am based in Barcelona and I get asked a lot of questions.’

Catalonia was, and will return to, being an important destination for investors, but for the time being ‘the situation is making the Spanish investment market smaller’, which is not a good thing for investors, she said.

Core investors like pension funds and insurance companies have been the worst affected, said Borja Goday, head of Iberia, Patrizia Immobilien: ‘They like stability and the current situation in Catalonia generates uncertainty. International investors are reluctant to close deals in Barcelona now, but they will come back. The Catalonia issue will be resolved.’

Offices and retail hit hardest
It is important to differentiate between asset classes, as some have been affected more than others, said Alvaro Otero, partner, CMS: ‘Offices and retail are the sectors suffering the most, as well as hotels because of the moratorium on developments. But logistics is still doing fine in Barcelona and in the region.’

The lack of investor interest has been noticeable, especially in the office sector, said Goday: ‘Take-up is undeniably lower than in recent years, because investors are adopting a wait-and-see attitude. But they still like Barcelona, so hopefully this situation will only be temporary.’

The Catalonia crisis, even at its worst, never had a contagion effect. ‘Fortunately the situation has not affected the rest of Spain at all,’ said Goday. ‘Investors are continuing to deploy capital in Madrid and they are also increasingly expanding into other cities like Bilbao, Valencia, Seville and Malaga.’

Active hotel market
Booming tourism, with some 82 million people visiting Spain last year, is driving the hotel sector. ‘We are seeing activity at all levels, from new development to refurbishment and rebranding of existing hotels, and in all areas, well beyond Madrid and Barcelona,’ said Otero.

The lesson of Catalonia can be applied to the whole of Europe, said Maurizio Grilli, head of investment management analysis and strategy, BNP Paribas Real Estate : ‘2017 has shown that geopolitics is important, but only up to a point. For investors the economic performance is more important, and what we are seeing is economic growth accelerating everywhere in Europe, except the UK where it is decelerating. I am not too worried about interest rates going up, and I don’t see a problem in terms of future demand, at least over this and next year.’