Catella, the pan-European financial group has said it sees reasons for international investors to once again consider the Spanish property market.
According to the group’s analysts, the turnaround in this market has come from a mix of factors, including increased investor appetite coupled with the effects of recent years’ economic reforms in the country. They identify 2014 as the turning point for this market.
Thomas Beyerle, head of Group Research at Catella, said that the process of growth in investor interest started with domestic family offices, before attracting investors from across Europe, and now “we are seeing many international core investors turn their attention to Iberia again.”
The popularity of the asset class has dampened yields. Currently estimates for Madrid and Barcelona respectively are 4.25% and 4.75%. The current average spread of some 200 basis points against 10 year government bonds is predicted to decrease to about 150 bps by 2018, Catellas suggests; this yield trend should also divert more investor interest to other Spanish cities, such as Seville, Malaga, Bilbao and Valencia through 2016.
The Catella Market Tracker – Spain, March 2016 is available at www.catella.com/research.