In this interesting article published by Tax News-Global Tax News and written by Ulrika Lomas, the author discusses how real seems to be the positive forecast of increasing possibilities for the Spanish property market for 2014.
A new report from the Urban Land Institute and PwC has found increasing investor confidence in the Spanish property market.
Sixty-seven percent of respondents who contributed to Emerging Trends in Real Estate Europe 2014 said that they believed there are now good opportunities in Spain, with the EUR162m acquisition of the Parque Principado mall in Oviedo by Intu and the Canadian Pension Plan Investment Board indicating mainstream interest in the market.
Joe Montgomery, CEO of ULI Europe, said that mainstream institutions were following opportunistic investors who entered the market when Sareb (a company which manages assets transferred by the four nationalized Spanish financial institutions) opened for business in 2013. However, he cautioned: “with limited signs of tenant demand and rental growth, questions remain as to how far the market recovery can go.” Skeptics warn that debt remains very hard to obtain, and that Spain is still a risky market.
The report also found 51 percent of investors seeing opportunities in Ireland, with Dublin transformed from a “no-go” location to “one of the hottest markets in Europe” in just two years.
Simon Hardwick, real estate partner at PwC Legal, said that there was “a battle for assets” underway, and that with intense competition over a limited supply in core locations in Europe, investors are having “to look at other opportunities and to accept more risk.” He added that the fast improving outlook for “non-prime” locations was evidence of this, but that PwC was “skeptical” that there would be a rush into the riskiest markets: “Investors’ interest remains focused primarily on sustainable returns from quality assets in good locations.”
Further, 71 percent of respondents believe that this will mean more equity for refinancing or new investment during 2014, in particular with increasing flow from sovereign wealth funds based in Asia. Fifty-one percent expect that debt for refinancing or new investment will increase, while only 15 percent expect it to become scarcer. However, there was no expectation of a return to pre-recessional levels, and southern Europe and the Benelux countries remain especially cautious.
The top five European real estate investment markets in 2014 are predicted to be Munich, Dublin, Hamburg, Berlin, and London.