FC Barcelona’s successful ‘Treble’ on the football field is reflected in the city’s property market with a winning combination of positive GDP growth, consumer confidence and favourable pricing placing the Spanish city on the global investment map
Barcelona’s success in this weekend’s Champions League Final is matched off pitch, where the city is increasingly on the radar of international real estate investors.
Wealthy foreign buyers have flocked to take advantage of the Spanish city’s recovering property markets and, by 2019, JLL expects it to compete with Europe’s property investment hubs such as Paris and London.
“Barcelona has emerged as one of Europe’s favourite investment destination recently, a positive indication that the improvement in the Spanish economy is being reflected in investor confidence,” said Shirley Ghan, EMEA research, JLL.
Spain’s recovery has prompted the International Monetary Fund (IMF) to raise its growth forecast for 2015 and 2016 to 3.1 percent and 2.5 percent, up from the 2.5 percent and 2 percent it forecast in April.
1. GDP growth
The remarkable economic turnaround is led by strong exports and, more recently, a return in consumer confidence. Although economic recovery only began officially in late 2013, the 0.9 percent GDP growth recorded at the end of Q1 2015 now places Spain ahead of some of its fastest growing Eurozone neighbours year-on-year.
Catalonia makes up 25 percent of the nation’s total GDP and the city’s property market has gained a reputation among the world’s wealthy as a second home hotspot in recent years.
2. Consumer confidence
Singer Shakira and FC Barcelona footballer Gerard Pique are among several notable names to reportedly be building homes there.
With a superyacht marina that regularly welcomes Roman Abramovich’s fleet, and 23 Michelin star restaurants, it’s easy to see why the coastal city has gained a reputation among the glitterati.
But, while high net worth buyers focus on Barcelona’s lifestyle assets, institutions are beginning to take notice of its property potential and other sectors are rising to prominence.
3. Positive pricing
“Pricing is one of its main attractions, with capital values still around 40 percent below its peak in 2007 for offices,” added Ghan.
“Future prospects remain strong, with our latest forecasts showing that Barcelona will deliver returns of above 10 percent per annum over the next five years, above other key European markets in the UK, Germany or France.”
Barcelona’s office and logistics sectors show particular promise and look set to grow by 5.3 percent and 5.2 percent respectively (rental growth), per year, between now and 2019.
The property market is further buoyed by interest from corporates, who are attracted to Barcelona because of its position as a centre for excellence in sectors such as health, design, research, sport.