Spanish real estate a hot buy once more

LONDON: Spanish real estate is hot property once again.

Investment in malls, warehouses and offices is this year set to reach the highest since 2007, just before the bursting of a decade-long property bubble tipped the economy into the worst slump in the nation’s democratic history.

Banks are clearing the way for the turnaround, beating their eurozone peers in ridding their balance sheets of foreclosed assets and luring foreign buyers to heavily discounted properties.

And with Spain’s economy now outpacing the rest of the continent, 2018 is set to be as strong for commercial real estate investment as 2017, according to Savills Plc.

“It’s basically the year when it’s all come together,” said Ismael Clemente, founder and CEO of Madrid-based Merlin Properties Socimi SA, Europe’s third-largest real estate investment trust.

“The Spanish economy is doing well, its banks are healthy, there’s a very investor-friendly legal framework and property is still cheap compared to other European cities.”

It’s a far cry from 2008, when investors couldn’t dump Spanish real estate fast enough. The recovery started four years later with a

41bil (US$49bil) banking-system bailout, and is gathering pace as lenders discount and clear out toxic property assets. — Bloomberg