Great Prices and Supply Make Spain a Major Real Estate Investment Destination

Costa del Sol has such appeal and continues to be in demand 

Great Prices and Supply Make Spain a Major Real Estate Investment Destination

It’s all too easy to focus on the incredible lifestyle attractions that entice people looking for a second home or an overseas property to Spain.

The incredible climate of the country, not to mention the stunning cities, superb beaches (and beach resorts), and varied terrain make imagining your new life in Spain about as easy as achieving it. With all the cheap flights and property choices, it’s no wonder that thousands of Europeans have turned their dream Spanish homes into a reality.

The wealth of variety and the value-for-money of Spanish property mean the market has become a hotbed for more serious investors; the kind of people that want to put their money in a safe place and get sensible returns.

The UK was the chosen destination for career investors interested in parking their wealth in property investments for quite some. The uncertainty of the Brexit has begun to unravel the reputation the country has for being a stable safe haven however, and the property markets in Spain and Germany are starting to draw attention.

According to a Knight Frank poll of 148 of the leading real estate investors controlling over £300 billion of real estate assets, 20% of the surveyed investors view Spain as their preferred market for investment in 2018, second to Germany. Only 12% of investors said that the UK would be their property investment destination of choice in 2017, down from the 27% for this year.

The investors were mostly concerned about the lack of available stock and the unrealistic prices in the UK.

By contrast, Spain has a rising demand for home, officespace, retail, and leisure facilities that make the residential and commercial markets particularly strong. The prices are also a fair reflection of the market value of properties. Because of the resurgent Spanish economy there is sure to be an increased demand for industrial and office space as time passes, according to the investors.

Spanish Property Sees Foreign Investment Double in One Year

Spain continues to be a fantastic place to buy property 

The latest data from real estate investment analysts JLL shows that the Spanish property market welcomed a total of €888 million from foreign investments during the first half of the year – over double the amount of investment in the same period of time in 2016.

The analysts found British, French, German, Swedish, and Russian buyers are still the largest sources of foreign investment in Spanish property, accounting for a total of 13.2% of properties purchased in Spain last year. This represented the largest amount of foreign buyers entering the Spanish market in over a decade, with all signs indicating 2017 will see another record set for foreign ownership.

Based on the figures from last year, Brits were responsiblefor 19% of the property bought by foreigners, once again taking the lead as the most prominent foreign nationality.

Eight percent of foreign buyers came from France, while 7.6% were German and 6.7% were Swedish.

A total of 53,000 properties in Spain were sold to foreigners in 2016, meaning that if current trends of foreign interest continues for the rest of 2017, there could be close to 100,000 Spanish properties sold to foreign buyers by the end of the year.

The Spanish property market is being boosted by more than just foreign interest. Domestic demand has increased thanks to the economic recovery and the growth of the job market, which has compelled young Spaniards to take their first steps on the property ladder; enticed by affordable property prices and favourable mortgages across the country.

Spain to Attract Massive Investment in Renewable Energy

Spain to Attract Massive Investment in Renewable Energy

Its n wonder with over 300 days of sunshine a year

that massive investment in renewable energy is coming again

The Spanish government hardly has the best record when it comes to supporting renewable energy. While the country has some of the highest levels of solar and wind power installed in Europe, most of these were installed before 2010; before the current Prime Minister Mariano Rajoy assumed power.

The People’s Party that Rajoy leads aren’t against the idea of clean energy. The problem is that the incentives the previous government put into place for solar power were too generous; it was impossible for the government to continue justifying them.

There was a time when Spanish home-and-business-owners who installed solar panels – or even power plant operators with solar farms – were rewarded. They were offered a good feed-in tariff that saw them get some euros in return for the kilowatts of electricity their solar solutions pumped into the national grid.

It was decided in 2011 that the scheme had become perhaps too popular, with over 8 gigawatts of solar power generated by that point. It was taking too much money out of the government, especially given the economic troubles and recession at the time.

Move forward to 2017 – and the introduction of the “Solar Tax” as it was affectionately known – and Spain is ready to become clean once again. There’s plenty of good reason why too. The southern end of Spain is one of the windiest regions in Europe, as you likely know if you’ve tried to sit at the beachside bars in Cádiz. Wind power – whether onshore or offshore – is an affordable and viable source of energy for Spain.

Add in that almost the entire country ranks in the top regions of Europe with the most sunlight and it becomes clear that Spain should become a solar power hotbed again.

This idea stands to become reality on the 17^th of May, as the Ministry of Energy, Tourism, and Digital Agenda of Spain will hold a renewable energy auction for three gigawatts of clean power. This basically means that companies interested in creating a solar or wind farm will be able to “bid” for large capacities. The winning bidder will be the one who offers the most competitive price for power per megawatt-hour, and will be chosen by the Spanish Electricity Market Operator (OMIE).

It’s expected that the auction will generate plenty of interest from companies; both Spanish and international. Firms from across Germany, China, South America, and the USA are expected to join all the Spanish companies trying to land contracts.

By this time next year, there will be far more wind and solar power available in Spain, built for less than the cost of coal power. This will translate into reduced bills for average consumers, and it also means that Spain will have cleaner energy and a more secure energy future.

Data Shows Chinese Investment Grows Four-Fold in Spain in 2016

Data Shows Chinese Investment Grows Four-Fold in Spain in 2016

More and more Chinese investors are coming to invest in Spain

Data from investment firm Baker McKenzie shows Spain has become the seventh-most attractive European country as far as Chinese investment goes, with over €1.7 billion of Chinese money entering the Spanish economy during 2016.

China, which is the second-largest economy following the United States, has started to become a more active investor in Western economies for some time now, and is a great investor in African infrastructure.

Most of the Chinese money entering Spain during 2016 went into infrastructure, entertainment, and the real estate industries. The Dalian Wanda group is one of the primary investors in real estate industries as China is purchasing commercial and residential property across Spain.

Other areas of Spain that have felt the financial clout of China are the sport industry (including a €200 million purchase of La Liga football club RCD Espanyol by toy car magnate Chen Yansheng), aviation, and the environment.

Baker McKenzie partner Maite Diez says that Chinese investors have been attracted to sectors in European countries such as the food industry because they gain access to supply chains. There is a growing demand for high-quality products in China, so these investors are keen to get their hands on them.

Chinese people are fans of Spanish products including wine, cheese, and olive oil, while the country is also beginning to embrace Spanish films and fashion. Tourism is also a major draw or the Chinese; Spanish cities are becoming hot destination for the growing middle class of China. They may still avoid the beach resorts of the country, but they are drawn by the inland areas.

Many European destinations are becoming cheaper for travel and investment for Chinese people, and this has caused an increase in demand as a result. While the typical Chinese tourist would once want to take selfies in front of Big Ben in London, the modern Chinese tourist wants to head all over Europe, including Spanish wine country and Provence in France.

Chinese firms have become quick to build up portfolios of Spanish real estate. They are investing in more than just residential properties too; picking up hotel chains, shopping malls, and movie theatres.

Much of the Chinese investment in Europe is still going to the UK, Germany, Switzerland and Finland, but Spain saw the sharpest rise in Spanish investment.

US Investment Fund Grabs €1.1 Billion Spanish Property Portfolio

 US Investment Fund Grabs €1.1 Billion Spanish Property Portfolio

The love of investing in Spanish property shows no signs of slowing down. Just recently the US private equity firm Bain Capital purchased a loan and real estate portfolio from three Spanish banks for the sum of €1.1 billion.

Spain looks an amazing investment hub for the next 7 or 8 years

Spanish banks stepped forward during the years following the recession and claimed ownership of thousands of distressed properties. Most of these banks have since gone on to try and sell the properties, even offering them at discounted prices to private investors who want to grab a bargain.

Bain Capital’s decision to purchase this portfolio show just how attractive Spanish real estate is to foreign investors. It’s impossible to know the exact details of the purchase but Reuters are reporting that around €220 of the €1.1 billion of the residential and commercial property all came from one Spanish bank.

The rest of the money went towards purchasing bad loans at face value from Spanish banks Sabadell and Cajamar. It’s believed that most of these loans were offered by the banks to small property firms that were going through bankruptcy. Bain said that these firms are backed by real estate assets and they outlined their belief that these property assets would be enough to recoup their money thanks to the rising property prices in Spain.

As Spain is currently experiencing historically low interest rates there’s never been a better time for this kind of investment from a firm that has the power to carry the burdens. After the recession of 2008 prices in the real estate market slumped by as much as 40%. While property prices are on the increase many properties are still severely undervalued and present a great investment.

The rental yields from commercial and residential property rose to 6.1% in the second quarter of 2016 in Spain, which works out at about five times the return on a 10-year, government backed bond. As such owning property in Spain has become quite the attractive bet across the entire spectrum of investment.

One of the managing directors for Bain Capital Credit, Fabio Longo, said that they see the potential of investing in the Iberian Peninsula, especially in real estate and non-performing loans.

Spain has now been recorded to be the sixth biggest real estate investment market worldwide.

Spain has now been recorded to be the sixth biggest real estate investment market worldwide.

Property for sale in Costa del Sol and the overall real estate market in Spain has now become the sixth biggest worldwide with regards to sales volumes confirmed by CBRE consultancy company annual data.

Spain

The real estate market in Spain came in 16^th in 2013 and 11^th in 2014 but has risen to 6^th place last year due to the remarkable sale growth of 2015 and has been seen in many other regions of the country.

Spain is showing a higher interest in property purchases than China, Canada and even France according to figures, this has begun bringing high investment companies like George Soros a leading US billionaire to look into the commercial sector in Spain.

The CBRE predicted that the Spanish property market in 2015 was to have a total investment of up to €13 billion, this would surpass the Spanish record of 2007 which was €10 billion just before the market crash took place.

Due to the much needed transparency and changes made to Spain’s real estate market, this has made for a much healthier sector and has deflected any unethical investors who affected the property market with artificial price inflation.

Within the residential property market, the rise in prices have been steadily increasing in the right way, this reflects on the sector that value for money and reduced properties in the Costa del Sol that are available shows when purchasers can make a good investment when buying good quality properties in the highly sought out areas of the world.

CBRE have said that the Spanish market is one of the places that property purchases will give investors a good return on rental income and also through capital gains making it more profitable than the real estate sector in the UK for example.

Confidence is flooding back to the Spanish market especially buying property in the Costa del Sol, CBRE data show that some of Spain’s capital is now making its way to overseas real estate with figures showing that half of last year reached €1.3 billion – showing a bigger investment overseas than richer countries such as Japan and Norway.