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.
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