Spain Remains Favoured European Property Investment Zone

By : Nick Marr

A European poll recently conducted by estate agents Knight Frank reveals that Spain is the leading European investment target for 2015. Germany is a close second.

According to the poll, 27% of more than 150 investors said that Spain was their investment target of choice for next year. Spain has long been a favoured option for overseas property buyers: in 2014 it was reported that sales turnover was up 250 percent on the previous year. The Spanish government was providing incentives to overseas buyers, and a stylish two-bedroom apartment in Barcelona could be had for £400,000.

Humphrey White, Head of Capital Markets at Knight Frank Spain, said that prime office rents have gone up by 20% over the past year, but are still close to 40% below the peak levels reached in 2008.

One-quarter of respondents said that their preference was for Germany, which mirrors the active investment activity taking place in the country. €30 billion was invested in German property during the first half of this year, which is a 35% increase compared to the same period in 2014.

Joachim von Radecke, who heads the German Desk at Knight Frank, said that the higher flow of foreign money into Germany and a corresponding rise in domestic investor activity have both contributed to the large increase. The German market share held by foreign investors keeps growing, and at present accounts for nearly 60% of all transactions that took place during the first half of 2015.

Chris Bell, Knight Frank’s Managing Director of Europe, said that the re-emergence of rental growth across Europe is encouraging. The trend is helped along by strong occupier demand and the decreasing availability of prime space worsened by lack of development activity during the recessionary years.