7 July 2015 – El Economista
Shopping centres are still the star asset in the real estate sector; and experts forecast that this year will see the second largest investment volumes of all time.
According to Pelayo Barroso, Director of Business, Analysis and Market Research at the consultancy Aguirre Newman, transactions amounting to €2,000 million will be closed during 2015. This figure is spurred on by the arrival of institutional funds specialising in this kind of asset.
“We do not expect the investment volumes seen in 2014 to be repeated – €2,500 million was invested in around 30 transactions. That was an exceptional year, but the forecast figures for this year are still very strong”, says Barroso.
It is worth noting that in 2013, total investment amounted to just €700 million, whereas during the year to date, transactions have already been closed amounting to more than €900 million. (…).
Centres up for sale
According to Aguirre Newman’s forecasts for the second half of the year, transactions worth €1,000 million will be closed, as a result of the sale of around 15 shopping centres, which are currently on the market. Moreover, Barroso explains that even though some assets are not officially on the market, “their owners are open to offers”.
The shopping centres that may be sold are “located in regional capitals and large towns”, which is just what investors are looking for. He adds that these assets are not only located in Madrid and Barcelona, they can also be found in cities such as Bilbao, Sevilla and Valencia.
In terms of the type of investor interested in these assets, the Socimis will continue to play an important role. The creation of several Socimis in a relatively short space of time and their need to invest within a relatively short timeframe, meant that they accounted for 24% of total investment volumes in 2014, according to data from Aguirre Newman.
Similarly, the arrival of overseas institutional investors with vast specialist experience in the sector has driven a lot of investment; these players accounted for almost 73% of total investment volumes last year.
Both Socimis and institutional investors have a long-term vision, explains Barroso. In this sense, he stresses that their objective is to optimise centres, reposition them and earn rental income from them. “They are not going to do what the funds that purchased shopping centres in 2012 and 2013 did, when they entered the market, only to exit again two years later.
In terms of the yields that these investors are looking for, the director explains that the returns on prime centres range between 5% and 5.5%. Whilst for secondary centres, yields start at around 6.5%.
Original story: El Economista (by Alba Brualla)
Translation: Carmel Drake
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