The big institutional investors are now targeting Spain, which has become one of the top four destinations in Europe alongside the UK, France and Germany, experts agreed at the Iberian Investment Briefing, organised by Iberian Property and Real Asset Media, which was held at the Spanish Embassy in London recently.
‘Spain is hot right now, there is no other way to describe it,’ said Audrey Klein, Managing Director International Institutional Clients, Corestate Capital Group.
‘Big international companies are increasing their allocations to Spain and more funds are coming,’ said Carlos Portocarrero, Partner, Head of Real Estate, Clifford Chance. ‘It is a very active and diversified market. We are not the UK or France yet, but we are getting there’.
What is encouraging is that investors are coming with a long-term outlook and targeting different sectors. ‘It is good to see that core money and opportunistic capital now coexist, which shows the range of opportunities that are available in Spain,’ he said.
Spain has acquired a reputation as a stable and investor-friendly country. ‘I hear more and more investors who want to increase their allocations to Spain and are here to stay,’ Portocarrero said. ‘They know that it is a flexible but steady country. Social housing can be subject to regulatory requirements, but in general rules and regulations are light and favourable to investors’.
Political risk doesn’t feature at all in the list of things investors worry about, said Klein: ‘It is simply not an issue. Even Catalonia didn’t come up in my discussions with clients, they are very relaxed. What they focus on is that things are improving at the micro and macro level in Spain’.
The new Government is unlikely to bring any dramatic change. In any case, it is the ‘second tier’ that guarantees stability and continuity, said Portocarrero: ‘Spain’s civil servants are extremely serious and competent and they create a wall against politicians’ worst instincts. At the end of the day, politicians come and go but civil servants stay’.
A Berlin-style cap on rents is being discussed, which is causing some concern, but according to Portocarrero ‘it will not happen. I see a bright future ahead for Spanish real estate’.
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