International funds investing in Spanish real estate are in it for the long haul claims an industry expert.
“This is just the start,” said Mikel Echavarren, head of Irea, a real estate consultancy, referring to international investors like Goldman Sachs, Bill Gates, and Pimco investing in the Spanish property sector.
The chart above, prepared by Irea, shows how dramatically foreign investors piled into the Spanish real estate sector last year.
Shown in yellow, foreign investment in Spanish real estate exploded from just 433 million Euros in 2012 to 5.2 billion Euros last year, taking it from 7pc of total inward investment in 2012 to 37pc in 2013, a twelvefold increase.
“The funds have spent years looking at Spain without any deals materialising, but now they are here to stay,” said Echavarren. “Las year was a turning point, where in an investment desert it began to rain.”
The biggest foreign investments so far have been in the property servicing divisions of banks, which allow funds to get a better idea of the market before they start buying real estate assets.
Spain has gone from being as seen by investors as “plagued” to being seen as an “opportunity” in 2014 / 2015, he said.