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Spanish Property Deals Begin To Progress

 July 10, 2014  /  Comments Off on Spanish Property Deals Begin To Progress

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Buyers and sellers of Spanish properties are finally beginning to haggle out prices, according to the Financial Times.

GreenOak Decides to Buy

John Carrafiell, co-founder of GreenOak Real Estate, tells the publication that after initial investments in countries such as the US, England and Japan, his company have decided, after nearly 12 months of discussions and negotiations, to move into Spain’s downtrodden property market. In conjunction with this decision, the firm have just announced the €160 million purchase of eight luxury shopping centres in the country.

“There was very little done [in Spain] before the summer of 2013,” says Mr Carrafiell, who was formerly the global co-head of Morgan Stanley real estate. “There is always a period of adjustment in terms of where buyers and sellers see value.”

Spanish Propety Deals Begin To Progress

Worth a Punt

The deal by GreenOak is not the only recent example of deals finally being agreed between buyers and sellers. Around €5 billion (more than twice the value for 2012) was invested in Spanish real estate last year, according to a report published by property consultancy, CBRE Spain. After the government introduced new economic reforms and indicators began to point in a positive direction, some investors decided that Spain’s property market had bottomed out and was worth a punt.

“No one wanted to put a penny in Spain, because many people thought there was a huge risk of it leaving the euro,” said CBRE Spain executive managing director, Enrique Martinez. “But at a certain point, the investor community realised that this would not happen. At that point, it was the herd instinct.”

At a property conference in Madrid this month, Marta Gomez, director of investor relations at the so called ‘bad bank’ Sareb, formed in 2012 to hold €51 billion in assets of Spain’s bailed out banks, said in 2013 she had communicated with over 700 funds who showed interest in Sareb’s portfolio.

In July last year, Blackstone purchased nearly 2,000 Madrid apartments for €125.5 million, and Goldman Sachs partnered up with a local firm in order to attain 3,000 more.

This year, Qatar based funds purchased 2 hotels, Barcelona’s Renaissance and Madrid’s Intercontinental. Canadian pension fund manager PSP and another local partner teamed up to buy Madrid’s Castellana 200 complex for a reported €140 million.

The shopping mall market has been particularly active because many centres had foreign owners who were eager to deal often because they had loans that needed to be paid and that would be difficult to refinance.

Experts Opinion

Ron Wilkinson of Alta Vista Property, a real estate firm focusing on the Costa del Sol and Marbella, says that the influx of retail sector purchases is a sign that the Spanish economy is recovering.

“The fact that more and more retail complexes are being purchased shows that Spanish consumers are beginning to require shopping facilities once more. This points to an increase in the levels of disposable income held by Spanish families and hopefully, it means that the economy is on the up.”

“Many of these shopping centres will be part of extensive regeneration projects in areas of Spain hit particularly hard by the recession, they will create jobs, both in construction and retail, and they are sure to provide a boost to the long maligned Spanish citizens.”

Brad Shore is an experienced blogger who specialises in property and investment news. He likes to inform his readers with his articles and his aim is to encourage people to make the correct decisions regarding investments.

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  • Published: 3 years ago on July 10, 2014
  • Last Modified: July 10, 2014 @ 6:45 am
  • Filed Under: Home Improvement

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