Value-add investments offer the best prospects of good returns in Spain, according to the panel at PropertyEU's Southern Europe Investment Briefing which was held in London this week.
Value-add investments offer the best prospects of good returns in Spain, according to the panel at PropertyEU's Southern Europe Investment Briefing which was held in London this week.
‘I would go for value-add, repositioning assets no matter what sector,’ said Mikel Marco-Gardoqui, head of capital markets Spain for CBRE, when asked where he might invest a theoretical €500 mln. ‘There’s a clear niche there and we believe the market will definitely help you on the value-add strategy.'
Patricio Palomar, head of research for CBRE Spain, highlighted the Madrid office sector. ‘Demand is extremely focussed on grade A buildings, but we don’t have good quality stock in the market and this is a really good opportunity to invest in new redevelopment and refurbishment. At the pace companies are taking up the good quality buildings, by the end of 2017 we are not going to have any square metres left available.’
Francois Rispe, who covers Spain as managing director of Prologis France, said value-add is 'clearly the number one choice'.
'If the expansion phase gets stronger, and with a stable occupier market it's not unthinkable that within a year from now we may start to see speculative development. It sounds a bit scary today, but I believe it’s likely in 12-15 months,’ he told the panel.
