This time last year foreign investors were shunning Spain, but now it is a star attractions with international investors, according to the latest annual “Emerging Trends in Real Estate” report by PriceWaterhouseCoopers (PWC) and the Urban Land Institute (ULI).
“The extraordinary turnaround in sentiment towards Spain is one of the most remarkable property stories of this year’s Emerging Trends Europe,” explains the report. “Within weeks of the country’s bad bank, Sareb, opening for business last summer, the rush of opportunistic investors into Madrid and Barcelona had turned into a veritable stampede. By the autumn, Spain’s transformation from property pariah to star market was complete. By all accounts, the revival is expected to continue in much the same vein in 2014.”
But there are also voices of caution articulated in the report. ““We think that it is a medium term play rather than immediate – but it is coming back,” says one pan-European fund manager. “You will see one or two benchmark deals, which gives confidence for others to go in on the best stock in the best locations.”
“It remains a dangerous market to be investing a huge amount in before there are some signs of growth, and at the moment that’s pretty anaemic,” says another.
And the risk of Spain leaving the eurozone is still pertinent, warns another. “Even if it is a small probability, it’s a small probability of a gigantic thing happening and you will lose 30 percent of the value of your property and income overnight, and you’ll never get it back. I just don’t think the Euro crisis is in any way over.”
[link type=”link-dark” href=”http://www.pwc.com/gx/en/asset-management/emerging-trends-real-estate/assets/real-estate-returns2014.pdf” target=”_blank”]Dowland report “Emerging Trends in Real Estate – Europe 2014″[/link]