It’s not over: Barcelona prop­erty bounces back

The Daily Telegraph - Property - - Front Page -

Spain suf­fered a seis­mic shock in Oc­to­ber last year when Cata­lans voted for in­de­pen­dence. Much like Brexit, it was a bit­ter and di­vi­sive ref­er­en­dum, with added vi­o­lence on the streets. The reper­cus­sions were swift. Madrid, which had de­clared the ref­er­en­dum il­le­gal, dis­missed the Cata­lan gov­ern­ment and im­posed cen­tral rule.

“The real-es­tate con­se­quences were im­me­di­ate,” said Em­manuel Vir­goulay, man­ag­ing part­ner of es­tate agency Barnes Barcelona. With big banks mov­ing their head­quar­ters from the city and some pro-in­de­pen­dence politi- cians flee­ing in self-im­posed ex­ile, non-Cata­lan Span­ish own­ers rushed to sell their prop­er­ties. Many sales com­pleted with dis­counts of up to 30 per cent late last year.

Up un­til then, things were go­ing swim­mingly in the lux­ury prop­erty mar­ket; in the 12 months to Septem­ber 2017, the av­er­age price of homes sold by high-end es­tate agent Lu­cas Fox rose by 14 per cent to £730,000 (€830,000). Un­der­stand­ably, there is now un­ease.

“Some in­ter­na­tional buy­ers who were once con­sid­er­ing Barcelona for a prime prop­erty in­vest­ment are now more wary, and have cho­sen Madrid as an al­ter­na­tive,” says Rod Jamieson of Lu­cas Fox. Prop­erty prices in the Span­ish cap­i­tal grew by 7.2 per cent in the 12 months to Septem­ber last year, ac­cord­ing to Knight Frank.

Beyond the Cat­alo­nia cri­sis, de­mand for prop­erty among in­vestors in Madrid has been grow­ing pro­gres­sively over the past three years since re­cov­er­ing from the crash. “Buy­ers in­ter­ested in Madrid are at­tracted by the fact it is the third-largest Euro­pean cap­i­tal with an im­por­tant busi­ness cen­tre,” adds Jamieson. “It also has a vast his­tor­i­cal and cul­tural of­fer­ing with world-renowned mu­se­ums, ar­chi­tec­ture, the­atres and they are usu­ally real city lovers.” Latin Amer­i­cans in par­tic­u­lar favour Madrid and ac­count for 18 per cent of buy­ers.

But can it com­pete with Barcelona? Due to its tourist in­dus­try and a grow­ing hitech sec­tor, Cat­alo­nia re­mains the rich­est re­gion in Spain. For re­tired or semi-re­tired ex­pats look­ing for an easy life­style, Barcelona prob­a­bly beats Madrid hands down. The check­list in­cludes the Mediter­ranean shore­line, sev­eral mari­nas, a vi­brant cul­tural scene, fash­ion­able beach re­sorts such as the Bay of Roses, and five eas­ily ac­ces­si­ble ski re­sorts.

“Barcelona has a pull for life­style in­vestors who are look­ing for a city on the beach. It at­tracts mainly north­ern Euro­peans and lo­cal Cata­lan in­vestors,” says Jamieson.

Another group some­what un­scathed by the ref­er­en­dum and eager to keep buy­ing in Barcelona are the ul­tra-high net worth in­di­vid­u­als: those with as­sets over £30mil­lion. Es­tate agency John Tay­lor thinks that as well as Asia, the Ibe­rian Penin­sula will be one of the ar­eas that this class will tar­get for prop­erty in­vest­ment, and opened new branches in Spain last year.

One com­pany ex­plor­ing this sec­tor is Squir­cle Cap­i­tal. Not to be con­fused with a Poké­mon char­ac­ter, it is the in­vest­ment firm be­hind Barcelona’s Man­darin Ori­en­tal ho­tel. It has just un­veiled its first res­i­den­tial project: the con­ver­sion of a land­mark build­ing known as Francesc Macià 10, in one of Barcelona’s best res­i­den­tial ar­eas. The Six­ties Bauhaus-style for­mer of­fice is one of Barcelona’s few mod­ern listed build­ings.

The chal­lenge of con­vert­ing this round prop­erty has been met by Brazil­ian ar­chi­tect Mar­cio Ko­gan of Stu­dio MK27.

There’s just one apart­ment on each floor and each has 180ft of win­dows. There is also a spec­tac­u­lar pool and spa, de­signed by Bas­samFel­lows. “We come from the ho­tel in­dus­try so we are al­ready ob­sessed with ser­vice,” says José Caireta, co-founder of Squir­cle. The com­pany set the bar high for the project at the ouset, so it made a 10-fold in­crease in the amount of com­mu­nal area you would nor­mally get in an apart­ment com­plex. Bas­samFel­lows fur­nished it with el­e­gant ma­te­ri­als through­out: Amer­i­can wal­nut, brass, basaltina stone, and Tu­nisian mar­ble.

Squir­cle sold three of the apart­ments very quickly to lo­cal fam­i­lies who had seen the project un­fold. Only one apart­ment is fin­ished, and the rest are shell and core. Buy­ers can put in their own de­signs and choose the num­ber of bed­rooms they want by adding in walls. The flats are €8mil­lion with Knight Frank, plus an es­ti­mated fit-out cost of €2mil­lion.

“We were very wor­ried ini­tially by the ref­er­en­dum, but at our prod­uct level it makes less im­pact,” says Caireta. His lat­est project with Squir­cle is re­de­vel­op­ing OneOcean Port Vell, one of only two mari­nas in Barcelona with berths for su­pery­achts – per­haps a sign of grow­ing op­ti­mism.

Avin­guda Di­ag­o­nal, Barcelona’s cen­tral boule­vard

A Barcelona flat for €1.9 mil­lion with Barnes, left; Squir­cle’s Francesc Macià 10 project, right

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