Country Report Spain Q2-2019
“The topic of sustainability is not just a trend. Instead we are seeing a long-term transformation.”

Dear readers,

Although REECOX Spain did not rise above the 200 point mark in the second quarter of the year, sentiment in the real estate sector remains positive. The Spanish economy is robust, there is considerable liquidity on the market and, above all, current interest rate policy is making real estate an extremely attractive asset class for investors. But there continues to be a shortage of supply. Above all in the retail and logistics segments there are simply no good properties available. That contrasted with the office market, which was even more dynamic in the first half of the year. There was both new construction and widespread renovation: Green buildings are increasingly in demand in Spain, which is why many properties are being modernised to meet sustainability standards. The topic of sustainability is not just a trend. Instead we are seeing a long-term transformation.

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 stable

The Spanish Real Estate Economy Index had a strong start to 2019. The first quarter was characterised by clear positive development (+3.8 %) and the index almost reached the 200 point mark. It ended the second quarter at a similar level, falling slightly (-0.6 %) to 198 points. However, considering the significant decreases in the second half of 2018, and compared to the other real estate markets observed by the REECOX, the overall development of the Spanish Real Estate Economy Index can be described as stable.

Real estate shares continue to perform well

As in the first quarter, the development of the REECOX was primarily driven by the dynamism of Spanish real estate shares as measured by the real estate index ES BCN 5 Property. It rose by 3.3 %, consolidating its position above the 1,000 point mark, which it fell below temporarily in 2018.

Meanwhile, the leading share index IBEX 35 was relatively stable. Compared to the previous quarter, it only decreased slightly, by -0.4 %, to its current level of 9,199 points. After its steep rise in 2017, followed by a slump to significantly below 9,000 points, the Spanish stock market displayed a certain level of consistency again.

The business climate as measured by the Economic Sentiment Indicator (ESI) was apparently unaffected by stock market developments, falling by 1.8 % compared to the previous quarter to its current level of 104.8 points, which is nonetheless higher than its temporary low in December 2018.

Synopsis of Input Variables and Real Estate Economic Situations Q2-2019

Country

Stock Index

Real Estate Economy Index

Economic Indicator

Base Interest Rate

Interest Rate 10-Year Government Bonds

Q1-1904/1905/19Q2-19Delta (%)
Q1-19 / Q2-19
DE
up
do
dodo
eq
dodo
303.4
302.4
303.1
296.6
-2.2
GB
up
do
dodo
eq
dodo
205.1
203.7
196.2
198.9
-3.0
PL
eq
up
do
eq
dodo
187.6
185.5
183.7
186.8
-0.4
NL
up
do
do
eq
do
191.4
192.9
188.4
188.4
-1.6
FR
up
do
up
eq
dodo
228.3
230.4
230.4
231.8
1.5
ES
eq
up
do
eq
dodo
199.3
198.8
198.2
198.0
-0.7