Country Report Spain Q1-2022
“Clients anticipate higher interest rates.”

Dear readers,

“With the economy slowly recovering from the coronavirus-related restrictions, the war in Ukraine is adding a significant amount of uncertainty back into the equation. Although Spain may be less directly affected than Germany on an economic level, the country is highly dependent on the business climate in Germany and the UK due to factors such as tourism accounting for a substantial share of GDP. While it remains to be seen how the situation will affect the sector, activity on the real estate market is currently high, especially in the office and residential segments. Some shopping centres have seen their customer numbers return to levels last recorded in 2019. The logistics sector continues to be the most attractive segment. The hotel market was optimistic going into 2022 but now faces an uncertain near-term future on account of the war in Ukraine. All in all, the real estate market is benefiting from the high rate of inflation, which currently stands at 8.4 %. In some cases, clients are moving up their refinancing in anticipation of higher interest rates. Right now, the main concern is how long inflation will last and how high interest rates will rise – both of which will play a decisive role in growth going forward.”

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’s upward trajectory ends as year begins

The positive trend on the Spanish real estate index, in place since the third quarter of 2020, ended as the new year started. At 181.6 points as at the end of the first quarter of 2022, the REECOX Spain was down 2.3 % compared to the previous quarter. While January (0.0 %) and February (+0.5 %) saw virtually stagnant development, the index tumbled by 2.9 % in March.

Spanish real estate share index FTSE EPRA NAREIT remains robust

The positive performance of the Spanish real estate share index FTSE EPRA NAREIT continued in the first quarter of 2022, once again posting price gains of 5.1 % to stand at 25.9 points. By contrast, the Spanish blue-chip index IBEX 35 recorded a loss of 1.2 % in January, followed by further declines in February (-1.6 %) and March (-0.4 %). All in all, it finished the first quarter at 8,445.1 points, having lost 3.1 %. Business sentiment, as measured by the Economic Sentiment Indicator (ESI), also developed negatively, recording a drop of 3.2 % to 104.8 points. March (-5.8 %) was responsible for the decline, following positive performance in January (+0.6 %) and February (+2.2 %).

Synopsis of Input Variables and Real Estate Economic Situations Q1-2022

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q4-2101/2202/22Q1-22Delta (%)
Q4-21 / Q1-22
DE
dodo
do
dodo
eq
upup
343.4
340.1
334.3
320.6
-6.6
GB
up
do
upup
upup
upup
218.5
220.7
218.6
218.2
-0.1
PL
do
do
dodo
upup
upup
197.6
194.9
190.2
189.5
-4.1
NL
dodo
do
do
eq
upup
202.3
198.1
194.5
194.6
-3.8
FR
do
eq
dodo
eq
upup
251.6
248.7
246.7
240.0
-4.6
ES
do
up
dodo
eq
upup
186.0
186.1
187.0
181.6
-2.4