New research1 by Cordea Savills, the international property investment manager, shows Spain’s Office sector offers one of the most compelling investment opportunities in Europe because of its strong correlation with the unemployment rate, which is falling sharply as the country emerges from deep recession.

Rental levels in Spain’s Prime Office sector have a six-quarter lagged correlation factor of 76% with the country’s unemployment rate in the two decades between 1994 and 2014. In 2014, Spain saw the largest annual drop in the number of unemployed since 1998. The unemployment rate fell from 25.2% in February 2014 to 23.4% in February 2015. Consensus forecasts are that the economy will grow by 2.4% in 2015 and 2.3% in 2016.


Analysis2 by Cordea Savills of the year-on-year rental growth of six property market segments of Madrid and Barcelona suggests that Spanish real estate generally has turned the corner, with no rental decreases in the first three quarters of last year and a small minority of decreases in Q4.


Spain’s improving property rental cycle, combined with a positive economic backdrop, is resulting in strong capital flows, which indicates that institutional investors are back in the market. Rolling annual investment volumes have increased 142% since bottoming at around EUR 2 billion in Q2 20133.


Source: Cordea Savills/Cushman & Wakefield/Eurostat
2 Source: Cordea Savills/Cushman & Wakefield
3 Source: RCA/Cordea Savills


Irfn Younus, Associate Director of Research and Strategy at Cordea Savills, commented:

“Prime property in prime locations is the most sought after by investors but a scarcity of assets means they are moving up the risk curve. Going forward, greater access to credit will be a key factor in stimulating investor activity.


“The Spanish property market offers attractive mid-to-late cycle investment opportunities for Europe-wide strategies. Prime yields will continue to harden due to a lack of assets, increased demand and the expected uplift in rents.”



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  • 30 April 2015