The hotel sector, the driver of investment in the second quarter
The hotel segment consolidates its position as an investment focus and drives real estate investment in Spain. According to data from the report published by BNP Paribas Real Estate for the second quarter of the year, investment reached 2.376 billion euros from April to May, 7.3% more than the period between January and March 2024.
However, investment in the first half of the year was 10.7% below that recorded in the same period the previous year (€4.6 billion). Nevertheless, despite this adjustment in investment volume, “the Spanish economy remains very solid, showing high resilience against global uncertainty and stricter financial conditions,” as noted by Borja Ortega, CEO of BNP Paribas Real Estate.
The second quarter of 2024 has been a key period for the real estate market, marked by interesting opportunities for investors. A positive trend is consolidating that will favor figures in the coming months. “An initial adjustment in interest rates has confirmed a long-awaited change in trend among investors, as it is generating a stabilization in returns,” says the consulting firm. Thus, an increase in transaction volume and investment is expected to become more evident by the end of the year or early 2025.
The hotel sector advances ahead of retail
The tourist appeal of our country is increasingly attracting the interest of numerous investors in the hotel sector in Spain. BNP Paribas Real Estate points out that the investment volume achieved in this segment between April and June (€1.034 billion) represents the highest quarterly figure in the last 12 months.
During the first half of the year, operations amounted to nearly €1.4 billion. Despite the dynamism recorded, when comparing the first semester investment with the same period the previous year, a 26% decline is noted. This drop could be explained by the two purchases made by the Abu Dhabi sovereign fund AIDA, amounting to approximately €1 billion, during the second quarter of 2023.
In the second quarter, the purchase of the Six Senses hotel in Ibiza by the Statuto Group for a total of €200 million was the most significant transaction. Additionally, the purchase of two hotels in Spain by the investment vehicle Moon GC&P Investments, in Tenerife and Menorca, with a transaction valued at €216 million, also stands out.
On the other hand, according to the latest “Hotel Investment in Spain” report prepared by Colliers’ hotel team for the first half of the year, one in three euros invested in hotels has been allocated to the luxury segment. The Balearic Islands led investment with 30% of the total, and Barcelona ranks second in terms of transaction volume, with a total of 13 transactions and €300 million.
Meanwhile, Spain consolidates its position as the world’s second-largest tourist destination, only behind the United States, according to the “Travel and Tourism Development Index 2024” (TTDI) prepared by the World Economic Forum. Therefore, it is not surprising that our country stands out among the most desired destinations for investment in the real estate sector.
For its part, retail has maintained its position in the second quarter, with an approximate volume of €463.3 million between April and June, with Madrid accounting for 53% of the signed transactions. In the first half of the year, investment amounts to €1.295 billion, confirming the return of capital to the retail sector, with a 262% increase compared to the first half of 2023.
Meanwhile, the logistics segment occupies the third position, with a recorded investment of €348 million in the second quarter. Forecasts for the second half of the year are also positive for this segment, with an expected total volume for the year approaching €1.5 billion.
Institutional funds account for 46% of investment
Regarding investor types, institutional funds remain the leading investor type in the second quarter of the year, with an approximate volume of €1 billion and a market share of 46%.
According to data from the report published by BNP Paribas Real Estate, Private Patrimonies (Family Offices) account for a 19% market share of the total investment and 33% of the number of transactions; while real estate companies and REITs account for 18% of the entire quarterly volume, with an approximate volume of €407 million.