The report, developed using data provided by 700 international investors, reveals that Madrid is the sixth most attractive city for real-estate investors in the world, ahead of major cities like Paris and Los Angeles, and only behind London, Tokyo, San Francisco, Sydney and New York, in that order.
Madrid's position in the ranking is due to a 98% increase in real estate investment in 2014 compared with the previous year, among otherFACTORS
. Only San Francisco saw a larger increase, of 126%.
. Only San Francisco saw a larger increase, of 126%.
OPTIMISMreturns
returns
The report also highlights that the improvement in the economic outlook and confidence means that optimism has returned to the internationalINVESTMENT MARKET. According to the data in the report, 53% of investors plan to increase their exposure to the real-estate sector. Therefore it is predicted that demand will overtake supply, increasing capital flow by 10% to 15%.
. According to the data in the report, 53% of investors plan to increase their exposure to the real-estate sector. Therefore it is predicted that demand will overtake supply, increasing capital flow by 10% to 15%.
38% of these investorsARE willing to invest outside their respective regions. Favorite regions for investors are Western Europe and the Asia-Pacific region.
willing to invest outside their respective regions. Favorite regions for investors are Western Europe and the Asia-Pacific region.
Offices are preferred by 33% of investors, and interest in logistics warehouses is also growing, from 14% in 2014 to 17% in 2015. On the other hand, the retail sector saw the biggest downturn.
According to the CBRE report, theINVESTMENT MARKET claims to be highly liquid, but investors are worried about high competition when it comes to acquiring assets. For this reason, they are looking toward alternative assets: 39% show interest in real-estate debt, which 33% have already turned to, while 22% are focusing on student residences and others continue to look for assets relating to the health and nursing home sectors.
claims to be highly liquid, but investors are worried about high competition when it comes to acquiring assets. For this reason, they are looking toward alternative assets: 39% show interest in real-estate debt, which 33% have already turned to, while 22% are focusing on student residences and others continue to look for assets relating to the health and nursing home sectors.
Price is the biggest obstacle when it comes to buying, as despite the report's positive data, thereAREstill doubts concerning the economic situation, with improvement in the United States and sustained growth in Asia.
still doubts concerning the economic situation, with improvement in the United States and sustained growth in Asia.
Patricio Palomar, director of Alternative Investments at CBRE, said: “Spain is following the trend set by other more mature markets in Western Europe, where the health and education sectors are seeing high interest from managers of specialized funds, and investment vehiclesTRADED in the United States. Proof of this is the acquisition of two student residences in Barcelona, and the two forward-funded developments announced for Madrid and Barcelona".
in the United States. Proof of this is the acquisition of two student residences in Barcelona, and the two forward-funded developments announced for Madrid and Barcelona".
In a context such as this, where traditional products like retail andOFFICES are seeing return levels of around 5%, so-called "high yielding assets" will take on a greater role in Spain, as with financial gearing they are the only ones that will offer investors close to double-digit returns".
are seeing return levels of around 5%, so-called "high yielding assets" will take on a greater role in Spain, as with financial gearing they are the only ones that will offer investors close to double-digit returns".
Finally, the report reveals that international investors seem willing to take on greaterRISKS to obtain higher returns. 51% of those surveyed affirm that this year they will focus on investing in opportunistic and value-added assets, compared to 43% in 2014.
to obtain higher returns. 51% of those surveyed affirm that this year they will focus on investing in opportunistic and value-added assets, compared to 43% in 2014.
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