Survey: What Will Happen in the Real Estate Sector in 2020 according to the Experts? interviews nine real estate experts to find out what the impact of Covid-19 is going to be on the Spanish market, how it will affect investment and which assets are going to be best positioned.

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Just a few years after starting its recovery from the most recent recession, the Spanish real estate industry is now facing a huge global crisis generated by the Covid-19 pandemic. has spoken to the heads of the main real estate advisory firms in Spain to find out what impact they think Covid-19 is going to have on the Spanish market, how it will affect investment and which assets are going to be best positioned.

Savills Aguirre Newman

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“Like with any change in the market, some investors see risk and others see opportunity. Every market is different, but in all cases, real estate is well established as an attractive asset class for long-term investors. In this sense, Spain is well-positioned and has strong fundamentals”, explains Alejandro Campoy, CEO at Savills Aguirre Newman.

“Many operations are underway in various phases and we expect activity to return with vigour during the second half of the year. Not only was there liquidity before this situation, but during this time new capital has continued to be raised by the various active funds”, says Campoy. He predicts that assets with medium and long-term contracts with good tenants will be the product that will attract active investors after Covid-19.


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“It seems likely that the entire real estate market will have to reset prices in order to adapt to the economic situation that will exist after the crisis, with the aim of boosting the sector and recovering activity as soon as possible. It is still too early to quantify the adjustments, but it is clear that they will be greater in those sectors in which the impact of the restrictions imposed by the State of Emergency has been more serious”. Sandra Daza, Director General of Gesvalt, has no doubt about the downward impact of the coronavirus crisis on real estate investment in Europe and Spain, due to the shutdown caused by the lockdown, which has delayed the completion of numerous operations.

However, once normality has been restored and in the absense of financing problems, the Head of Gesvalt predicts that “some investors may prefer a defensive strategy, looking for assets with good tenants that generate recurring income even if the situation continues. However, there will always be others, and more so at this time, who will look for more affected assets, but with greater potential for increases once the recovery kicks in – those looking for the best opportunities will grab onto the assets with the largest discounts. In any case, purchase prices will be negotiated downwards to the extent that the assets in question are more or less affected by the new situation”.

In terms of sales, Daza believes that there will be investors who will continue to try to exit non-strategic assets, possibly by reducing the price. “Those who cannot take the drop will postpone the decision, at first, but may be forced to sell if the economic crisis continues in the medium and long term.”


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“Whenever there are adjustments in the economy, real estate operations are closed,” says Iván Azinovic, Head Partner of Real Estate at EY. He estimates that this year, transactions will be postponed until the third quarter. “In the case of my clients, we are continuing to work on the operations that were underway, without entering into any price renegotiations, but it is true that the speed is different because the market has entered a state of torpor. Until September, people are not going to know what’s happening and so there will not be any operations until then”, says the Partner at EY.

By type of asset, Azinovic believes that the adjustments will be seen first in nursing homes and hotels, in other words, “the assets most affected by this crisis”. That is where there will be operations, at least initially. “In the office segment, where several funds are in the exit phase, there will also be transactions, even if that means that the sellers have to accept lower profits from their investments in Spain,” he points out.


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A transitory situation, the duration of which is unknown, but either way, it is temporary. That is how Mikel Marco-Gardoqui, Managing Director and Head of Capital Markets at CBRE Spain, sees the reality of the real estate sector after the coronavirus. He highlights that during the first quarter of the year, the real estate sector in Europe captured €85.5 billion, a record figure, and the Spanish market recorded interannual growth of 54%.

“The high activity during the first quarter of 2020 indicates the large amount of capital available for investing in the European real estate sector. This leads us to think that activity will regain strength once the uncertainty surrounding Covid-19 has faded. Investors assume that we are in a transitory situation, the duration of which is unknown, but either way, it is temporary. Fortunately, the real estate sector has entered this phase of instability with solid foundations and so should be able to regain its good form in the medium-long term. Nevertheless, it is almost certain that the forecasts for investment volumes made at the beginning of the year will not be fulfilled”, indicates the Director at CBRE.


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The high liquidity in the market, a situation not seen in previous crises, is the key reason why now we see a less optimistic scenario than in other situations of economic difficulty, says Neil Livingstone, Managing Director of Capital Markets at Colliers International Spain.

“In the European context, the demise of the real estate sector is not going to be as drastic as that of other sectors, due to its safe-haven nature. And there will be less impact on assets in the most prime locations. Many transactions prior to the generalised lockdown have continued, although volumes are decreasing considerably “, explains the Director of Colliers.

“We are also seeing that some strategic acquisitions are continuing with very significant volumes. In general, the launch of new products has been put on standby, and more than ever, we are in a wait and see mode. We think that it is likely that we will see some new very important operations from the end of this summer, depending on the exit strategies of each country”, adds Livingstone. In the case of Spain, he believes that there will be “a significant adjustment in the not-so-prime asset segment” in closed transactions “in a second stage when the horizon has cleared.”


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A return to sale & leaseback operations by owners of hotels and commercial assets with liquidity needs. Plus, sales of NPLs and REO portfolios from the fourth quarter onwards. That is the forecast set out for the post-coronavirus Spanish real estate sector by Cristina Treceño, Senior Consultant in the Valuation & Advisory team at the real estate consultancy Catella.

“Nevertheless, there is still a lot of liquidity in the Spanish market and investor interest remains very high. We expect a total volume by year end of around €8 billion”, says the Director of Catella.

Knight Frank

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Price decreases of 5% for core assets and of between 10% and 15% for value added properties, with significant activity in the last quarter of 2020. That is how Humphrey White, CEO of Knight Frank in Spain, sees the Spanish real estate market over the coming months. He predicts that it will be marked by two milestones: “post-lockdown and post-vaccination”.

“I think that some of the trends that are going to be implemented post-lockdown will continue, such as the system of work as a hybrid between working from home, from the office and flexible offices. This formula, which was already being adopted in the United Kingdom and the United States, together with an increase in the technical demand for high-quality buildings, will cause grade B offices to suffer. Meanwhile, core properties, which do not necessarily have to be located in central areas, will recover first”, explains White.

“We mustn’t forget that, now more than ever, in a world marked by fear, where there is also excess liquidity, prime assets are going to be a safe-haven,” he says, pointing to two types of assets that he thinks will reflect the reactivation first: logistics and residential properties for rent. “We think that the summer is going to be much more active than normal, with exponential growth in the final quarter, as well as in residential rentals. We also expect to see some opportunistic operations in the hotel sector, with larger price corrections,” he adds.


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A negative impact on real estate investment both at the European and Spanish levels, although with nuances by type of asset. That is the diagnosis of Sergio Fernándes, Investment Director at JLL Spain, regarding the impact of Covid-19 on the real estate sector in Europe. He considers that each local market will also be uniquely shaped depending on the circumstances in each country after the pandemic.

“It is likely that the market will continue with most of the operations that had been started before Covid-19 and that all kinds of opportunities will be offered covering the entire spectrum, from very prime assets to discounted assets. However, the latter will certainly be the ones that take the longest to reach the market, “says the Director at JLL, who recalls: “On a positive note, investors are as hungry to invest in the main sectors and markets, and at the same rate as they were before the Covid-19 crisis”.


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Sales and subsequent rental operations driven by financing needs and “multiple” sales of discounted assets in secondary areas and provincial capitals. That is how Belén Díaz, Managing Director and Partner of Valliance, foresees the investment market in Spain. She expects activity to be slow, with hardly any new opportunities until the end of the year.

“With regards to Spain, we expect a fall in investment in 2020 of between 20% and 30%, to reach between €8.4 billion and €10 billion by year end. This will be especially relevant in the short term, since investors are still analysing the situation and, therefore, waiting to see how consumption reactivates”, says Díaz. “This scenario, which will affect all segments, will probably have a lesser impact on logistics, offices and alternative assets, which will maintain a certain degree of stability in terms of prices and yields. On the other hand, a greater impact is expected in both the short and medium-term in the hospitality, retail and housing sectors, with falls in rents and the compression of yields”.


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