Spain and Portugal are bucking the trend during this crisis, delegates heard at Real Asset Media’s Iberian Market Update briefing, which took place online recently.
The two sectors that have been worst hit by the pandemic in the rest of Europe – hospitality and retail – are the ones that are attracting the most attention from investors in Iberia.
‘There is a lot of activity in the hotel industry,’ said António Gil Machado, Director, Iberian Property. ‘There have been 15 deals across the region, islands included. There is a normal level of investor interest, because they know that over the long term tourism will grow at double digits again’.
One example is the recent acquisition by Portuguese holding company Palminvest of the Hotéis Real portfolio of 12 hotels for €300 million.
There are rescue plans for the sector in place in both Spain and Portugal and both countries will return to being ‘tourism superpowers’, he said: ‘This moment could be seen as a huge opportunity for investors to buy distressed asset at a discount’.
Investors know that ‘in order to be a serious player in Iberia you have to be in the hospitality industry,’ Gil Machado said, because the tourism sector is key to the Iberian economy.
Iberia also breaks ranks when it comes to the retail sector.
‘I know that retail has a bad image elsewhere in Europe, but in Iberia it has always been a sector that has performed strongly and it continues to do so,’ he said. ‘In both Spain and Portugal there is a long-standing tradition of going to shopping centres’.
Consumer preferences are not changing and this is fueling interest in the retail sector. Big deals are still being done, such as €525 million Sierra Prime deal, a Sonae Sierra portfolio of six shopping centres, with Allianz Real Estate among the buyers.
‘We are seeing the crème de la crème, the very best of investors being active in the sector, which shows how important it is,’ Gil Machado said. ‘There is still a strong case to be made for retail in Iberia’.