According to international real estate advisor Savills, the significant fall in commercial property investment volumes throughout Spain over the last two years is showing signs of stabilizing. This is expected to create a window of opportunity for equity rich investors as pricing of prime properties becomes more attractive.
Savills' research shows that office investment transactions throughout the country have fallen by 70% and retail by 50% in H1 09, compared to the same period in 2008. In addition, the European Commission has announced that Spain will be the only country in the euro that will continue to be in recession next year. However, other European countries such as France and Germany, along with Japan in the wider global market, have shown signs of growth and recovery over the last few months, which indicates positivity for Spain moving forward.
Rafael Merry del Val, Head of Savills Spain, comments: "The investment market throughout all sectors has been very challenging over the last 18 to 24 months with a substantial fall in values. However, the small signs of recovery that some European countries have shown has provided reasons for optimism moving forward. The office and retail values in prime locations appear to have bottomed out, which is making pricing more attractive to investors looking to take advantage of the window of opportunity before values begin to increase again.
"This demand is very much focussed on prime property that offers strong covenants and a secure income. The secondary market, however remains stagnant."