There were contrasting fortunes for the two largest southern European investment markets last year.
In Spain commercial real estate transactions (excluding mergers and acquisitions) climbed from just under €10 bn in 2017 to €10.8 bn last year, driven by a surge in investment by international investors. Including M&A transactions, the 2018 figure is €13.5 bn, according to Real Capital Analytics.
In Italy, BNP Paribas Real Estate says transactions dropped by over 20% from €11 bn in 2017 to €8.6 bn in 2018.
According to Savills Aguirre Newman, 68%, or €7.3 bn of the €10.8 bn invested into Spanish real estate, was from foreign investors, the highest proportion in the last five years.
Europe and the US accounted for almost 57% of total investment and 85% of cross-border volume.
Logistics saw the biggest increase and jumped 61% to €1.3 bn in 2018 due to some large deals such as Blackstone’s €290 mln purchase of the Colver portfolio from Neinver and Colony at the end of the year.
Some of the biggest deals were for retail property, a sector that transacted a total of €3.4 bn in Spain last year, Savills found. Unibail-Rodamco-Westfield sold four shopping centres for €489 mln, to Castellana Properties; Sonae Sierra and CBRE Global Investors offloaded three to J&T Real Estate, with Sonae Sierra keeping an interest, for €485 mln; and Deka paid €366 mln for Inditex’s high street sale-and-leaseback portfolio early in the year.
Luis Espadas, director in capital markets at Savills Aguirre Newman, commented: ‘2018 really was the year of foreign investment in Spain. We have had a high volume of portfolio deals across all sectors, with cross border interest in high street retail, shopping centres, logistics and offices.’
Italy particularly suffered in the first half with some investors cautious about the new populist government. However, the market did finish the year with a strong final quarter when Savills says €3.5 bn was transacted.
A notable trend in Italy was a 30% pick up in activity in the Rome office market.
This article first appeared in EuroProperty, PropertyEU's sister publication