Country Report Spain Q3-2018
“The office asset class has recovered significantly after a weak start to the current year.”

Dear readers,

The REECOX fell slightly in the third quarter. That development doesn’t surprise me because the primary driver was the IBEX 35, which has displayed a negative trend over the past three months. Does that represent a turning point? I think the IBEX 35 currently reflects a number of uncertainties with regard to the European Union and the global economy – more than the present situation in the Spanish economy. We continue to see a lot of activity on the Spanish real estate market, above all in the areas of retail and logistics, but the office asset class has also recovered significantly after a weak start to the current year. A number of portfolio transactions were recently completed. That means demand remains very high – but there is a lack of available properties.


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

Spanish Real Estate Economy Index falls below 200 points

While the Spanish Real Estate Economy Index reached new highs in autumn 2017 and, most recently, this summer, in the third quarter it fell to 196.4 points, a decline of 3.8 % compared to the second quarter.

Significant decline in the IBEX 35

This development was primarily due to the significant decline in the IBEX 35, which fell below the 10,000-point mark after peaking briefly in June. It ended the quarter at 9,389.2 points, a significant decrease of 10.1 % compared to the second quarter. The downward trend was mostly seen in July and August, with the index largely stagnating in September. That means a clear trend has yet to emerge.

The ES BCN 5 Property real estate index also declined: Following positive development in the summer, in the third quarter it fell by 6.7 % compared to the previous quarter, to 1,005.2 points.

The assessment of the business climate by real estate experts as reflected by the Economic Sentiment Indicator (ESI) also decreased in the third quarter, following stable development in the first two quarters of 2018. The index’s current level of 105.5 points represents a fall of 3.6 % compared to the previous quarter, to a level last seen in December 2016

Synopsis of Input Variables and Real Estate Economic Situations Q3-2018

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q2-1807/1808/18Q3-18Delta (%)
Q2-18 / Q3-18
DE
eq
up
eq
eq
eq
310.7
314.9
316.3
312.8
0.7
GB
do
do
up
upup
up
219.0
218.8
218.8
216.5
-1.1
PL
up
do
do
eq
eq
189.1
190.8
189.8
188.3
-0.4
NL
up
do
eq
eq
eq
200.4
201.5
200.5
199.3
-0.5
FR
up
do
do
eq
eq
237.7
238.9
237.9
236.2
-0.6
ES
dodo
do
dodo
eq
eq
204.1
200.7
198.8
196.4
-3.8