Massive influx of capital, key factor in European real estate market in 2015

Despite the weakness of the economic conditions and the concerns regarding the geopolitical situation in some areas, optimism in the real estate sector for 2015 is clear and all previsions point to a significant increase in activity. This is reflected in the report Emerging Trends in Real Estate – Europe 2015, published by PWC and the Urban Land Institute, and supported by the conclusions and shared opinions of participants in the latest edition of Mipim.

This confidence in the increase in real estate activity is down to the great availability of investment capital, which is pushing up the value of assets in the main European markets, particularly those in the euro zone. Concerns over the increase in price, however, are offset by the fact that, with interest rates low, the profitability of the real estate market continues to be more attractive than other types of investment. By sector, logistics properties are the most in demand given the boom in e-commerce, followed by the office and residential sectors.

In terms of Catalonia, the arrival of capital that began in 2013 is showing no signs of stopping, fueled by investment opportunities and a notable improvement in the economic panorama. This capital mainly comes from global funds, opportunistic funds, investment banks, fund managers and Chinese and American real estate moguls.

Barcelona, specifically, is experiencing a notable increase in the interest of real estate investors and has jumped nine positions to thirteenth on the ranking of European cities with the best investment perspectives. It must be noted that in 2014 international funds helped put real estate investment in Barcelona at levels that hadn’t been seen for the past 10 years, for a total volume of operations over 1.3 billion euros.

Likewise, the debate entitled Emerging Trends in Real Estate – A Global Outlook for 2015, held at Mipim and moderated by the Urban Land Institute (ULI) and PWC, highlighted the noteworthy increase in international funds from around the world investing in the real estate sector and seeking different types of investment. In this regard, urban development, technological improvements and political and demographic tensions are seen as the main factors taken into account when considering investment options.