Investment in Spanish office buildings fell by 27% to €970m in the first half of the year, according to consulting firm Aguirre Newman.
The fall was driven by a slowdown in activity by Reits (known in Spanish as Socimis), as well as a decrease in assets supply, political uncertainty in the country and lower prospects for global economic growth.
Office investment in Madrid totaled €700m in H1 2016, which is a 35% drop from the same time a year ago. In Barcelona, investment in offices decreased by 15% to €270m.
The study noted that Reits, which represented between 40% to 45% of the total office investment in 2014 and 2015, have trimmed their investment activity significantly in H1 2016 — with a current share of just 3%.
Alejandro Campoy, Aguirre Newman’s general manager of the investment area, said the drop is linked with Reits being focused now in the management of the assets acquired previously.
However, investment activity is expected to reactivate in the second half of the year, which will up Reits’ share of total office investments in Spain to 15%.
The report shows that low returns on fixed income, in some cases negative, and high volatility of equities, accentuated after the UK’s vote to leave the EU, will increase the attractive of office investments.