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The consolidation of Build to Rent and the Data Centre market will mark the growth of the real estate sector in 2022

15 de March de 2022

The advisory firm expects house prices to enter a growth slowdown phase after a 3.7% year-on-year rise of in 2021.

The consolidation of Build to Rent and the Data Centre market will mark the growth of the real estate sector in 2022

Gesvalt has published its 2022 Trends Report. The study, carried out by the company’s Research department, expects that Spain’s house prices will stabilise in 2022. Likewise, the firm foresees a growth in investors’ demand for rental housing, as well as an increase in sales and mortgage loans.

The study recently presented by Gesvalt highlights that the trends that emerged in the pandemic will continue over the next year, driven by the foreseeable reduction in uncertainty and the consequent economic boost. Sensitivity towards sustainability issues is also expected to increase for the various players within the real estate market, that is, buyers, users, developers and investors.

Likewise, the Build to Rent model will play a significant role in this year’s real estate market, with an expected increase in investment of more than 10%, thus consolidating its growing trend, after recording a 30% rise in 2021. In any case, the Spanish real estate industry will also be marked by higher inflation, which will especially impact on new construction due to the increase in construction costs, and the new Housing Act.


Logistics industry boom

The logistics industry, which closed 2021 with a 33% increase in investment volume, has become the non-housing segment receiving the most investment, thus becoming one of the drivers of the recovery of the real estate market and the economy in general. Madrid and Barcelona are the cities leading this segment and the areas where most transactions were closed last year. In fact, the supply available in 2022 in Madrid is expected to grow by almost 990,000 m², with more than 10% of floor space already engaged. In contrast, growth expectations are lower in Barcelona, where the current amount of logistics land is expected to increase by 400,000 m².

Furthermore, as stated in Gesvalt’s report, there are no indicators that this upward trend will not continue in the coming years. In this sense, the exponential growth of data centres is to be highlighted, with Gesvalt’s expectations doubling its investment volume this year with the objective of reaching 600 MW installed capacity in 2025, compared to the current 180 MW.

Recovery of the retail and office markets

In 2021, retail was marked by the uncertainty derived from the health situation, a context that caused significant price reductions in this segment, although milder than those observed in 2020. The sector closed 2021 with an investment volume of € 1,320 million, which accounts for a 30% YoY decline. For 2022, Gesvalt expects investment volume to recover figures close to € 2,000 million, driven by a greater number of transactions in retail parks and also by the long-awaited recovery of street level stores. In addition, the advisory firm thinks that 2022 will mark the starting signal for the recovery of the sector in terms of consumption.

This segment is facing great challenges as regards returns and adaptation over the coming years, so aspects such as digitisation, data usage and automation will play an essential role in the future. Moreover, as detailed in the study prepared by Gesvalt, sustainability, local production and transparency are increasingly relevant to consumers, so retailers must be able to appropriately convey these aspects to gain a competitive advantage.

As regards the office market, it is beginning to recover after two years suffering the consequences of the pandemic. This is mainly due to the existing liquidity and the recovery of investor appetite during H2 2021, which accounted for more than 27% of the total investment in non-housing real estate assets, only surpassed by logistics, which monopolised 29% of the total transactions.

So, Gesvalt highlights that this year offices are expected to be able to adapt to the current flexibility of the labour market, which demands a hybrid office/remote working model, and this is expected to remain after the recovery of the economic scenario.

Digitisation: a key point for the entire sector

Gesvalt’s report concludes that, in 2022, real estate developers and agencies must seek new alternatives to attract clients and be able to carry out specific processes without physical presence. Online signing of mortgage loan agreements, professional management of potential buyers and tenants supported by big data, use of machine learning to predict demand or virtual visits are aspects in which it must advance in the coming months.