Country Report Spain Q2-2022
“Investors are already looking ahead to the end of the cycle.”

Dear readers,

“Despite the announcement of rising interest rates and lower than expected economic growth, the real estate market in Spain continues to record high levels of activity. If the current pipeline can be sustained, a new investment record may be reached by the end of the year. That said, investors are already looking ahead to the end of the cycle, and in certain cases, some transactions have already been delayed in order to have greater certainty with regard to pricing. Pricing for developments has also been affected. As in previous quarters, the residential rental segment is the most appealing – at approximately EUR 1.3 billion, this is where investment volumes were once again the highest. Logistics properties also continue to attract the attention of investors. Having only generated modest levels of investment in recent quarters, the office segment in Madrid rebounded in the second quarter of 2022 and is once again seeing a great deal of activity. The challenges that may emerge after the summer depend on the speed of any interest rate hikes, as potential restrictions on the supply of energy will greatly affect market trends in the latter half of the year.”


Your Maria Teresa Linares Fernández

Contact

Ms María Teresa Linares Fernández
Managing Director Spain

Phone: +34 618 109905
E-mail: Maite.Linares@Deutsche-Hypo.de

REECOX Spain records a moderate decline

The Spanish real estate index continued its downward trajectory in the second quarter of the year. However, it recorded the smallest rate of decline (-1.7 %) of all of the European markets monitored by REECOX. The loss of 1.9 % recorded in April was almost offset by a 1.8 % increase in May. However, this was followed by yet another decline in prices of 1.6 % in June, bringing the index down to 178.4 points.

Spanish real estate index FTSE EPRA NAREIT suffers double-digit losses

The positive performance of the Spanish real estate index FTSE EPRA NAREIT had already come to an end by the beginning of the second quarter (-2.2 %). A virtually unchanged performance in May (+0.1 %) was followed by a steep decline in June (-15.3 %). The index tumbled by 17.0 % quarter on quarter to stand at 21.5 points at the end of June. The decline in the Spanish blue-chip index IBEX 35 was noticeably slower, falling by 4.1 % to close out the quarter at 8.098.7 points. This was primarily due to poor performance in June (-8.5 %). Quarter on quarter, business sentiment dipped only slightly, by 2.2 % to 102.4 points. This was due primarily to the substantial increase in May (+4.1 %).

Synopsis of Input Variables and Real Estate Economic Situations Q2-2022

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q1-2204/2205/22Q2-22Delta (%)
Q1-22 / Q2-22
DE
dodo
dodo
dodo
eq
upup
320.6
310.1
308.5
289.8
-9.6
GB
do
dodo
dodo
upup
upup
218.2
205.6
203.4
202.5
-7.2
PL
dodo
do
do
upup
upup
189.5
187.5
185.3
183.1
-3.4
NL
dodo
dodo
dodo
eq
upup
194.6
194.2
192.2
184.8
-5.0
FR
dodo
dodo
do
eq
upup
240.0
234.8
233.6
225.6
-6.0
ES
do
dodo
do
eq
upup
181.6
178.2
181.3
178.4
-1.7