‘There is a lot of activity in the market and the year has started on a high note in both countries,’ said Reno Cardiff, international partner and head of CMG business space at C&W Spain. ‘Growth has been exponential, with Iberia increasing its share as a percentage of transactions in Europe from 1% to 5%.’

The crisis that hit the region was long and painful but it had a silver lining, as it has now led to a stronger and more sustainable market. ‘The recovery has been astonishing,’ said Eric van Leuven, director and head of Portugal at C&W. ‘The Iberian property market has now regained the strength and vitality it once enjoyed, yet with more caution and sound leverage and operating ratios.’

A concerted and sustained joint effort by companies, investors, developers, lawyers and public authorities to make the market more professional and more sustainable has borne fruit. Legal and tax reforms have helped attract investment while in Spain, in particular, the creation and development of Socimis or REITs has acted as a dynamo in the market. Portugal is set to follow suit, possibly before the end of the year.

Compelling fundamentals
The current backdrop in both countries is one of compelling fundamentals and sustained GDP growth supporting the office and residential sectors and strong consumer confidence and exponential growth in tourism feeding into hospitality, retail and food and beverage. ‘Investors are more realistic and continue to diversify, and there has been a massive increase in alternative sectors like student housing and nursing homes,’ said Cardiff.

Domestic investors, often with foreign money behind them, are very active in the market, while there is a shift in capital flows from abroad. North American investments have fallen by 45% and over the next few years they are likely to be replaced by investors from the Asia-Pacific region. ‘We are beginning to see Chinese money coming in, but at the moment it is focusing on specific investments in Barcelona, Madrid and Southern Spain,’ said Cardiff.

The briefing also saw the launch of the first ‘Iberian real estate investment guide’, just published and jointly put together by Cushman & Wakefield and Uría Menéndez, that aims to give a panoramic view of all sectors of the market and all aspects that can be of interest to potential investors, such as financing, regulation and taxation.

‘We have a soft spot for Iberia, as it has been the most successful and profitable office for C&W in recent years,’ said Van Leuven. ‘We are an Iberian firm, not Spanish or Portuguese, and we have an Iberian approach to the market which we believe is good for both countries and will create momentum,’ said Joao Torroaes Valente, counsel at Uría Menéndez.