Real estate e-report 2015 | Page 2

Special focus: Real estate Blowing bubbles? Foreign investor interest in the Iberian real estate market has led to a ‘hotel boom’, while deals are becoming bigger and more complex – however, the good news is tempered by a shortage of good assets and fears that supply could outstrip demand. Is a real estate bubble being created? The Iberian real estate market is back with a bang, according to lawyers, with the recent glut of transactions – which are becoming larger and more intricate in nature – demonstrating that confidence has returned. Indeed, some lawyers argue that the current levels of activity show that the real estate sector is now as buoyant as it was before the crisis. One of the most notable transactions of late was Merlin Properties Socimi’s €1.79 billion purchase of Testa Inmuebles en Renta. Meanwhile, Lone Star Funds’ €1 billion residential golf resort project in Vilamoura on the Algarve demonstrates that there is hot property to be found in Portugal. “The market is now back to normal and it is expected that the share of real estate-related work in the coming years will keep increasing,” says Orson Alcocer, partner at DLA Piper in Madrid. Optimism abounds in Portugal, meanwhile, where the surge in foreign capital targeting assets in the country is picking up increasing in Linklaters’ Lisbon office, says: “The share of speculative investors chasing big-ticket deals remains high, but it has been recently decreasing by virtue of the arrival of the more core and traditional-type investors – in any event, distressed and opportunistic investments still represent a significant portion of the total volume.” Hotel boom Pedro Ferreirinha, partner at Vieira de Almeida, points out that developers are, in the main, looking for buildings in Lisbon and Oporto that Buildings in the can refurbished city centre of Madrid and quickly reintroduced into and Barcelona are the residential and highly sought after for retail markets: refurbishment. “They are clearly José Luis García-Manso more focused on investments with Pérez-Llorca a shorter time to market that can benefit from the competitive incentives scheme that Portugal momentum. Ricardo Reigada has in place for property Pereira, a managing associate “ 52 • IBERIAN LAWYER • September / October 2015 ” rehabilitation.” ABBC partner Luis Filipe Carvalho, who cites a “hotel boom” in Lisbon, adds: “This conjuncture led to an increase of the average square metre price which impacted the national market creating a greater demand for leases instead of acquisitions, due to the lack of access to credit for housing W Hotel Barcelona purposes.” Madrid and Barcelona have been the hubs for investors in Spain, according to lawyers.