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Spain's only Complete Real Estate Index
Investment in the Spanish real estate market hasn't ceased to grow in the last few years. Instead, property investments in Spain have risen thanks to the globalization the real estate sector, a trend led by large international banks and investment funds.
According to the study Global Capital Flows published by the Spanish real estate services company Jones Lang LaSalle, 2006 promises to be another record year in global real estate investment. Approximately $290 billion were channeled into worldwide real estate investments in the first half of the year, representing a 30% increase from the corresponding period in 2005. If Jones Lang LaSalle's predictions prove to be accurate, the sector could close the year with a total investment of $760 billion; 26% more than the total in 2005.
Globalization continues to exert an added impact on investment in real estate assets. In Spain, international investment in the sector has come to represent an impressive 44% of the total volume, as compared to 34% in 2005. The largest real estate development projects supported by international investment funds were built in Europe and generated a third of the total amount invested worldwide.
In terms of points of origin of international investment in real estate, investors in the U.S. spent the most by allocating $10 billion to property assets outside of their country. Investors in the Middle East, spurred by the rise in oil prices, invested $8 billion in properties in the U.S. and Europe. In Australia, the U.S. and Europe were also the most attractive places to invest: a total of $5 billion were invested in these markets.
Office Buildings and Hotel Developments Most Attractive Projects for Investment
Although office buildings continue to represent the largest percentage of real estate projects, investment in hotel developments is steadily growing in popularity. According to the study by Jones Lang LaSalle, 48% of investments in the first half of the year – totaling $33 billion – were designated to office buildings. This figure represents drop in 4 percentage points from the last year's figure, while the amount invested in hotels has grown by 3 percentage points to reach 23% (totaling 16 billion dollars).
