The Spanish real estate market saw record levels of overseas investment in 2018, according to a new report from Savills Aguirre Newman.
Data from the international real estate advisor shows that 68% of the €10.8 bn invested in Spain came from foreign investors – the highest proportion in the last five years. On average, the figure represents an increase of 12 percentage points over the last three years.
According to the data, the volume of cross-border investment reached €7.3 bn – 23% higher than the final figure recorded at the end of 2017. In terms of origin, Europe and the United States accounted for almost 57% of total investment and 85% of volume in cross border operations.
'2018 really was the year of foreign investment in Spain. We have had a high volume of portfolio deals across all sectors, with high cross border interest in high street retail, shopping centres, logistics and offices,' said Luis Espadas, executive director in the Capital Markets Division, Savills Aguirre Newman.
'We expect to see increasing demand for all these sectors and investors can expect to see strong returns in a thoroughly positive climate. Rents continue rising and economic indicators for Spain show better evolution than average across the rest of Europe,' Espadas added.
In terms of specific sectors, the boom in e-commerce meant that logistics saw the biggest increase over the 12 months, rising 61% compared to the end of 2017 at €1.3 bn. This was due to several notable deals including the purchase of the Colver portfolio by Blackstone at the end of the year. International buyers dominated transactions, securing 87% of logistics deals.
Retail remained popular with €3.42 bn of investment over the 12 months – 68% of which was from overseas. Investment into commercial high street premises saw the biggest rise, reaching almost double sums recorded for 2017 (€1.15 bn).
The office sector also had a positive year with investment (€2.2 bn) up 19% compared to the end of 2017. 67% of this came from overseas players, another paradigm shift, Savills said.