Commercial real estate investors turn to Iberia in 2018

The overwhelming majority (87%) of investors in Iberian real estate, plan to increase or maintain their allocation over the next 12 months, according to a new report commissioned by Intertrust, the leading global provider of high-value trust, corporate and fund services.

Of those already invested in Iberia, a quarter (24%) plan to increase their exposure, higher than those for the UK, Germany and the Nordic region.

The survey also found that half (48%) of real estate investors in Europe have increased or maintained allocations to Iberia over the past 12 months.

The survey highlights the growing confidence in the region, with respondents citing economic growth, the rising rental market and the rise of niche sectors such as student accommodation and hotels as the top factors driving investment.

“One of the most encouraging stories in European real estate since the global financial crisis is the return to favour of the Iberian market,” said Jon Barratt, Head of Real Estate at Intertrust. “Whilst rising interest rates and stretched valuations have fuelled investor caution in traditionally strong markets such as the UK and Germany, fast recovering economies in Iberia have put Spain and Portugal firmly back on the radar of a much broader group of investors.

“Iberia isn’t without certain headwinds. Political risk remains the biggest concern, driven by the Catalonian crisis. Competition for assets is already high, and the insufficient availability of developed land for construction coupled with a shortage of core assets will create supply restrictions that could mitigate growth over the longer term.”

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To read the full research report, click here.