It is a clear fact that foreign capital is strongly committed to the recovery of the real estate sector in Spain. Fundamentally since 2014, several firms have entered in Spain through the purchase of office buildings, shopping malls or logistics complexes. Subsequently, several funds landed in SOCIMI’s that have raised more than 3,000 million to invest in tertiary assets. In recent months, these international companies have taken the leading role in the purchase of land and residential development in Spain, looking for the returns offered by a market that is waking up.
In the last year these foreign funds have entered with force to the residential business. The soil is still cheap compared to the period before the crisis. In addition, there is confidence in the recovery. These funds are interested in buying land because they have to meet their high capital returns, of around 20%, and it is in the residential where they are now finding these returns.
These are safe investments for this foreign capital, because there is a lack of new housing after the break due to the brick crisis started in 2007.
Funds have become in recent months to buy land or reactivate housing, unlike other segments such as offices or shopping centers, where competition is greater. They have injected capital to companies stopped since the crisis and have relied on local knowledge of Spanish partners. It is essential to consider that there are sectors, such as tourism, which are always key to the Spanish economy. Others, such as finance or real estate, are once again gaining prominence and have been among the most active in 2016. By type of investment, foreign direct investment has greatly changed its sectoral composition. There’s a notable increase from 2012 investment in real estate, which in 2015 represented 12.9% of the total productive foreign investment, which has increased to 27.1% in March 2016.
Real estate investment in Spain will close the year marking a new high. In the absence of a month to finish the exercise, the data indicate that it will exceed 13.9 billion euros, 8% more than in 2015 and 45% more than in 2014. The SOCIMI’s have played the leading role, the main operations in Spain and represent 40% of the total investment. Although the national investor shows increasing enthusiasm (its weight has increased five percentage points compared to last year), so far more than 37% of the investment has come from abroad.
For foreign investment, we offer legal assistance regarding funds from other countries for investment in real estate and business. Our team has extensive international experience and cooperation agreements with international firms. We are also members of the Association of International Property Professionals (AIPP).This allows us to offer detailed advice in the field of internationalisation by providing services such as: International Trade Consulting, recruitment, formation of companies, subsidiaries and branches and Advice on tax issues