At Urbanitae, our goal is to democratize real estate investment, ultimately meaning that “anyone who wants to invest in real estate should first think of Urbanitae, and second, of buying a property.” These are the words of our CEO, Diego Bestard, in a recent interview with Capital magazine.
During the interview, Diego Bestard provides a comprehensive overview of the current state of real estate investment and, of course, the present and future of Urbanitae.
Real estate investment to rebound in 2024
The effects of interest rate hikes were felt in real estate in 2022 and 2023. According to CBRE, last year real estate investment in Spain fell by 36%, albeit after a record-breaking year. “Major global investment groups have shifted from investing in real estate to focusing on assets that, due to risk or profitability, made more sense for them in this period of high interest rates,” explains Bestard.
It’s important to note that, in the case of Urbanitae, the reality was precisely the opposite. With over 118 million funded, we increased funding by over 80% compared to the previous year, closing 2023 with an annual return of 16%.
With interest rate declines on the horizon, it seems that 2024 could be a year of reactivation in real estate investment: again, according to CBRE, it could grow up to 10% in Spain. Bestard points to a recovery in demand for new construction housing, “although we will continue to see increases in housing prices due to a lack of supply.”
The role of banks
In this context, banks seem to be in a very different situation than the one that precipitated the 2008 crisis. As Diego explains, “in the past, the bank financed the purchase of land, construction, promotion… the entire process. The developer risked very little capital and assumed a risk higher than what they could afford.”
Today, as we know at Urbanitae, banks are practically prohibited from financing land. Additionally, they require around 50% of pre-sales and obtaining the construction license to grant developer loans.
In this context, Urbanitae emerges as a natural partner to cover the financing needs of developers that banks cannot reach. “In the more than 130 operations we have carried out, in approximately 100, we are hand in hand with the bank, either because we are financing the construction with the bank or because the bank itself has brought us the operation for us to enter the capital, and they can go on to finance the debt,” explains our CEO.
France, Portugal, Italy… America?
Regarding Urbanitae, international expansion is one of our strategic objectives for 2024. We have just announced the expansion of our team in France and Portugal. We hope that the addition of José María Carpio and Simão Cruz will bear fruit during the first quarter of the year. Italy is the next step, but Bestard does not rule out new markets: “We do not rule out the possibility of entering the United Kingdom or, eventually, even jumping to America. Probably more the United States than Latin America, to start.”
Why invest in crowdfunding
The acceptance of real estate crowdfunding and, in particular, the model proposed by Urbanitae, is crucial in future plans. In this regard, our CEO highlights the attractions of investing in real estate through crowdfunding: the possibility of diversifying into 20 or 40 different assets; investing in an asset that preserves its value very well, and simplicity: “It is important to understand where we are investing, and real estate allows that, it is something tangible.”
Want to know more? In the interview, Diego talks about how he sees Urbanitae in five years, what drives the company, sustainability, and even gives advice to entrepreneurs. We invite you to read it!
