Real estate investment will be reduced between 20% and 30% during 2023
The Spanish real estate investment is going to be reduced between 20% and 30% during 2023 according to the data offered by the ‘Real Estate Market Outlook 2023’ report presented this Wednesday by the real estate consultancy CBRE. This will be a second drop even steeper than the first after showing signs of growth in the latter part of the year.
The most attractive sectors for investors will be residential and industrial, although an increase in the volume of investment is also expected in operating segments, such as hospitals, residences for the elderly, educational centers and hotels. In this sense, the director of Capital Markets of CBRE Spain, Relinque Dovehas explained that the high volatility expected for this year “will not facilitate decision-making by investors, who will be much more selective.”
Relinque has indicated that the improvement of the macroeconomic context will allow recover the path of investment growth throughout the second semester, “although it will depend on how long it takes to adjust prices. The longer we delay in this necessary adjustment, the more impact we will see in the volume of investment,” warned the director of Capital Markets.
CBRE has indicated that real estate investment will look for differentiating elements in 2023 such as quality, ESG and flexibility when selecting its assets. The Head of Research at CBRE Spain, Miriam Goicoechea, He has pointed out that investors will look for assets “that stand out from the rest” and that “comply with the best quality standards”.
Slowdown in residential sales
The residential segment will continue to be the protagonist in 2023, with a mismatch between increased demand and limited existing supply. This will make less traditional products, such as student residences, nursing homes or ‘flex living’, receive more and more attention by offering vital experiences and high flexibility.
Less traditional products went from representing 22% of the total residential segment in 2019 to 51% in 2022. For its part, the residential market for sale start a slowdown phasealthough CBRE anticipates that it will be very limited in time, especially in new construction, which maintains its dynamism.
Investors will also take notice throughout this year in the logistics sector. CBRE has anticipated that rents in this segment will continue to rise due to the lack of supply, high demand and high construction costs. “The offer in construction will continue to be high, with more than 1.5 million square meters to deliver in the next three years in center and Catalonia. A drop in new projects is not expected, but a certain slowdown in investment in projects at risk is expected, mainly due to uncertainty due to high construction costs, the scarcity of land and financing,” Goicoechea explained.
With respect to retail segmentthe ‘prime high-street’ product and supermarkets will continue to generate interest and electronic commerce will continue to act as a catalyst, both in this segment and in the logistics sector, which is increasingly relevant for CBRE.
In the area of Offices, CBRE has forecast a good 2023, taking last year’s good data as a reference. Nevertheless, the real estate consultancy has foreseen a slight reduction in the contracting figures as a result of the economic slowdown. Thus, investment in offices in Madrid will contract by close to 5%, while in Barcelona this adjustment will be 10%.
CBRE has highlighted that this setback is due to the fact that the offices are undergoing a process of transformation and adaptation to the new ways of working. In it hotel segment, the favorable prospects for tourism augur a good year for demand and investment. Nearly 30% of the new openings will be high-end (five-star and five-star luxury) and 50% of the total will be concentrated in Madrid, Malaga, Valencia and both archipelagos