“We maintain our overweight call on the Spanish market, expecting a strong real estate outperformance over the coming few years”, Deutsche AM analysts noted on Wednesday. “Not without risk – particularly political – Spain should continue to benefit from an improving economy, rental growth and positive investor sentiment. With the recovery embedded we see greater scope for selective risk, taking on asset management in core locations while also considering opportunities in well connected edge of CBD overflow locations.”
According to the Deutsche AM Spanish Real Estate Strategic Outlook the recovery in the economy is directly translating into additional demand for real estate space. By mid-year office annual take-up in Madrid was running at its highest level since late 2008, while vacancy levels in Barcelona fell by over 100 basis points.
In total €5.7 billion of transactions were completed in the first half of the year. While 5% down on the same six month period in 2015, activity has picked up strongly as the year has progressed, and remains well above.