After Brexit, UK Funds bet on Property in the Valencian region

The UK exit from the European Union is turning into a golden opportunity for the Spanish property market. Many UK funds are betting on residential property assets in Spain, especially those in the Valencian Community.

Translation and adaptation of an article in the Levante El Mercantil Valenciano business paper (original article).

In the last few months and as a result of the political and economic uncertainty in the wake of Brexit and Theresa May’s loss of her parliamentary majority, British companies have been buying up property. This includes apartment blocks, shopping centres, student housing and even hotels.

According to market sources in the Comunidad Valenciana, funds are getting returns of up to 30% from investment in this type of asset. Considerably more than those available in Madrid or Barcelona after the high rise in prices in both these cities.

Proof of the strength of British investment can be found in recent property transactions. The Aberdeen fund, for example, bought El Manar shopping centre for €38.1 million. The centre has 24,500 square metres, parking for over 1,300 cars and tenants that include Media Markt and Carrefour. Intu Properties has committed to investing €500 million in the Puerto Mediterráneo shopping centre in Valencia.

One of the busiest funds is Princeton Investment, which bought a 10,100 square-metre office building for conversion into student housing expected to be ready for 2018-2019.

Another recent transaction was made by Atitlán Capital, that together with the son-of-law of the owner of the Spanish supermarket chain Mercadona, bought the Formula 1 site in Valencia. The land has 300,000 square metres and has been earmarked for one of the biggest residential developments in Valencia.

The investment location generally depends on the type of asset. Properties are mainly situated in the Alicante area, student housing in the Valencia-Burjassot-Moncada triangle and hotels in La Marina and Valencia. Foreigners buy 25.5% of properties in the Comunidad Valencia, double the average for Spain as a whole.