he volume of investment in office buildings in Barcelona has reached almost 450 million euros in the first quarter, compared with 40 million in the same period last year.
Investement in the Spanish real estate market has reached an impressive velocity, especially in the capital and in Barcelona. In the first three months of 2017, the volume of business transacted for the office market reached almost 900 million euros, a figure twice that registered for the first quarter of 2016, and almost 30% of the figure for the whole of that year.
These are the data from real estate consultants Savills, who have highlighted two mega-operations – of more than 100 million euros – which have notably boosted the figures, accounting between them for a little over a third of the total. In the second week of January Merlin Properties announced the purchase of the Torre Glòries for 142 million, maintaining its original use as office space. This was one of the highest value transactions Barcelona has seen in recent years, surpassed only by the 145 million which Deka shelled out in 2010 for Caja Madrid´s old headquarters on the Diagonal Avenue. The second mega-operation was for a portfolio from Boston, made up of 14 office buildings which had belonged del BBVA 8 in Barcelona and 5 in Madrid which has passed to Oaktree and Freo.
The proportion of assets transacted on the Barcelona market – 20 out of the 35 which have changed hands in the first quarter – has increased significantly as a proportion of the national average, exceeding 20% for the first time ever. The volume of investment in office space for the city reached almost 450 million in the first quarter, compared with 40 million in the same period last year. It has, in other words, gone up by more that 1,000%
Returning the focus to Madrid, the office market there has seen transactions of a little of 400 million euros, distributed across 13 assets, which puts the average transaction size in the region of 30 million. Despite the investment activity for the quarter being greater for Barcelona, the average transaction volume is greater for the capital has been much higher – 40% up on Spain´s second market. In terms of year on year comparison, investment volumes in the capital have grown by more than 60%, though it is necessary to recognise that a substantial percentage of the operations signed between January and March were begun in 2016.
Among the Madrid transactions, the sale of the headquarters in Plaza de Colon, stands out. It was acquired by CBRE Global Investors for more than 55 million euros.
Savills noted that “the scarcity of available assets for sales is being alleviated by the interest in the ´off market´ market. This interest is both on the part of buyers, avoiding very competitive processes and allowing them to be more aggressive on price, and sellers, who don´t see their expectations on price frustrated”. With regard to profitability, the theoretical levels for Prime-CBD assets are 3.25% for Madrid and 4% for Barcelona.
Good data for logistics in Barcelona
The logistics market has also shown strong signs of improvement in both cities. In the first three months of the year the demand for logistics facilities went up by 38% compared to 89,968 square metres transacted for the same period in 2016. However, that business has not developed similary for all zones due to the scarcity of logistics space both in band 1, where there are not offerings to meet demands of more than 10,000 square metres, and in band 2. According to data from consultants CBRE, logistics facilities transcated in Barcelona amount to around 125,000 square metres between January and March 2017, while in Madrid the figure reached 130,000 square metres.
The lack of availability, referring principally to large scale units in areas close to the city, has given rise to “turnkey” projects, such as those which have been developed in the second and third bands of Barcelona” explained Alberto Larrazábal, National Director for Industrial and Logistics at CBRE, adding that “the market is tending toward new developments on this formula which makes it necessary to provide new services to logistics operators and companies, using buildings and construction specifications aligned to its business models”. CBRE has confirmed that operators who are bound to the e-commerce sector, food, and distribution, are those who have signed the greatest number of transactions, and have made the biggest volumes of investment.
In the case of Madrid, the transactions for the logistics sector during the first quarter were for 130,000 square metres, 13% less than the levels for the same period in 2016, which saw transactions for 150,000 square metres. “Even though there has for sure been a certain reduction in the Madrid market, it has not been very significant, and it has in general terms been a positive quarter given the scarcity of existing, large-scale logistics units. And in the coming quarters, transactions will be signed which will see the figures for the uptake in Madrid looking very positive again”, noted CBRE.
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