Special focus: Real Estate 2017 Special focus Real Estate 2017 | Page 7

Special focus: Real Estate
Spanish retail property transactions on the increase
Investment in retail property in Spain has exceeded €3.2bn so far this year, with a number of major
assets having changed hands in recent months
Considerable activity in the Spanish real
estate sector has generated optimism
among lawyers, who also anticipate an
increase in the regeneration of premium
properties in city centres.
“The general opinion is that the
market still offers great opportunities in
Spain, where the cycle is still at an early
stage, with growth and great potential,”
says Maria Luísa Guardo, head of real
estate at the Spanish law firm, Broseta.
“The volume of real estate investment
closed the third quarter of the year at
around €8.7bn, 40 per cent more than
the same period of the previous year,
according to data from JLL [Jones Lang
LaSalle].”
Guardo is particularly positive about
prospects in the retail sector. “The
segment with the most investment
volume so for this year is retail, with
significant deals in recent months
including the sales of Mercardo de San
Miguel and Mercado de Fuencarral,
or Gran Via 18, in Madrid,” she says.
“This segment already exceeds €3.2bn
in investment so far this year, with
remarkable growth compared to 2016 –
offices and hotels also have a significant
investment volume of around €1.7bn.”
The expectation is that for the time
being, the pace of investment will
continue, as real estate is seen as a
relatively safe asset. “Geopolitical
uncertainty has moderated investors’
expectations in certain sectors, but real
estate remains a very attractive market
due to the relationship between risk
and profitability,” says Guardo. “The
risk of instability in Europe and in the
world could accelerate the demand for
real estate as a stable asset and source
of income.” She adds: “The shortage of
product at locations of interest could
lead investors to explore investment
opportunities in secondary cities –
another significant trend will be the
rehabilitation of buildings in premium
locations, especially in city centres,
which is an opportunity to add value
and increase the quality of certain
properties.”
Maria Luísa Guardo
Demand for Portuguese real estate assets exceeding
supply
Demand among foreign investors for
Portuguese real estate assets is soaring
with the result that, in some segments
of the market, it is starting to outpace
supply, says Maria Margarida Torres,
a senior lawyer at Caiado Guerreiro in
Lisbon.
The measures taken by the
Portuguese government aimed at
attracting foreign capital in the wake of
the financial crisis – such as the Golden
Visa scheme introduced in 2012 and
the non-habitual resident tax regime,
implemented in 2009 – have attracted
investors from around the globe.
Foreign investors’ continued interest in
the Portuguese market has resulted in
an increase in real estate prices. “The
biggest challenge that our clients are
facing at the moment is the price of real
estate, which has increased significantly
in recent times,” remarks Torres.
In addition, Torres says there is a
shortage of completed developments,
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which are in high demand. “Only a few
developments are completed and ready to
be sold at present and new properties are,
for the most part, still under construction,”
she explains. According to Torres, demand
for all types of Portuguese real estate is
high, from residential developments to
office buildings, hotels and short-term
rental properties.
The majority of the deals in the
Portuguese real estate sector involve
assets being bought by foreign investors,
says Torres. “For the most part, investors
come from abroad, mainly from non-
European countries such as South Africa,
China, Brazil, Lebanon and Russia,” she
adds. “They are particularly interested in
new and luxury properties, especially in
Lisbon city centre.”
As well as purchasing completed
properties and developments at the high-
end of the market, investors are targeting
old buildings with a view to refurbishing
and selling them on, Torres says.
Maria Margarida Torres
September / October 2017 • IBERIAN LAWYER • 53