In the third quarter of the year, the valuation market rebounded in all segments of the real estate sector, consolidating the path of recovery coinciding with the advancement of the vaccination plan. Real estate assets in the logistics, multi-family residential , office and retail sectors closed the month of September with a positive quarterly variation in their valuation.
This is revealed in the quarterly report of the CBRE Index , the first index of valuation of real estate assets belonging to listed companies, developed by the Valuation & Advisory Services area of CBRE, which analyzes about 151 assets with an aggregate area of 2.6 million of square meters and an added value of 7,000 million euros.
The real estate sector stands out in this regard (where 43 properties have been analyzed), since its valuation shows a quarterly growth of 2.05% compared to the second quarter, while so far this year the valuations have grown by almost 10% . Since this index began to be developed (at the end of 2014), the assets of this real estate segment have registered a revaluation of 54%.
“The logistics sector continues to break all records in terms of investment levels and yield understandings . It is expected that, by the end of the fourth quarter, the prime yield will be set at levels of 4%, figures never recorded in the sector.
Investor continues to grow for the last mile product, for the acquisition of portfolios and for products with long-term contracts “, says Fernando Fuente MRICS, Senior Director Valuation & Advisory Services CBRE Spain, who adds that” we are the second country in volume of logistics investment in Europe “.
The residential rental segment is consolidated as one of the main drivers of real estate and, according to CBRE data, accounts for almost 25% of the accumulated investment for the year. In this case, the valuation of assets has increased by 1.38% in the last quarter and by 5.42% since a year ago – 63 valued assets that add an added value of more than 1,105 million. “For the second half, we expect investment volumes to remain solid or even growing,” says Fuente.
In the case of returns, according to CBRE, prime rates remain at 3% in Madrid, while in Barcelona they have experienced a contraction from 3.5% to 3.25%. “However, we have seen a rise in prime rents in the last quarter from 23 to 24 euros / m² / month in Barcelona and from 24 to 26.5 euros / m² / month in Madrid”, explains Daniel Zubillaga, Senior Director Advisory CBRE Spain MRICS.
Change of trend in retail
Within the assets of the traditional equity sectors, those of retail have increased their value in the third quarter by 0.74% compared to the previous one, after suffering an adjustment of 0.21% in the second quarter .
“The numbers of inflows and sales continue to approach those of 2019, closing the shopping centers managed by CBRE in August 2021 with a differential of -25.6% in inflows and -15.5% in sales compared to August 2019, which confirms a gradual improvement of these indicators, coinciding with the progress of the vaccination plan and the progressive reactivation, “says Fuente, who adds that” these figures are not homogeneous since secondary and convenience centers are still well below the pre-figures. -pandemic”.
“The retail sector has shifted towards a path of greater recovery,” says Javier Kindelan, vice president of CBRE Spain FRICS.
The report shows that the prime profitability of shopping centers remains at 5.50%, mainly due to the lack of transactions , while in street stores, the prime profitability drops again to 3.25%, “increasing the distance from the secondary school, since investors are still interested in assets with prime locations and powerful tenants, “adds Zubillaga.
Back to the office
In the office market, the behavior of asset valuations continues on a positive path in the third quarter of the year, registering a revaluation of 0.49% compared to the previous quarter and 0.67% so far this year – after analyzing 26 assets that add more than 310,000 m2 of surface-.
The behavior of this segment in the third quarter of the year is marked by the return to the office and the improvement in fundamentals. CBRE data show that the take-up compared to the second quarter has grown by 9%, representing a total of 171,000 m² contracted. Madrid registers a total of 99,000 m2 and Barcelona 72,000 m2 . According to the CBRE report, the prime yield has been compressed in the third quarter of the year, returning to the levels of 3.25%.
The total investment volume in the third quarter is 873 million euros, representing 38% in Madrid and 62% in Barcelona , being much higher than previous quarters, and focusing above all on core product .