For the second year in a row, in 2016 experts can’t stop talking about them and they will, once again, become the true driving force in a time of growth in the Spanish real estate sector. Joint capitalisation of all real estate investment trusts (REITs) on the Spanish stock market totalled €8.2 billion in 2015, making up two thirds of the country’s real estate sector. Plus, they are also supporting most of the weight of investment in construction, with more than €5 billion, or 46%. They are, therefore, the driving force and benchmark in a context of growth after years of stagnation and recession in high-volume companies.
Rentals are the most profitable segment in the real estate sector, and where REITs focus their attention. Despite offering shareholders noteworthy profit margins, they have returned confidence to the sector and their desire to offer safe investment options has made them a reliable player. In 2014 and 2015, REITs burst onto the Spanish market and in 2016 they are expected to invest around €11 billion.
REITs are known in Spain as SOCIMIs. They must have at least €5 million in social capital and be traded on regulated markets or through multilateral negotiation systems. Plus, they offer advantageous tax conditions in exchange for distributing the profits obtained from renting and selling assets.
According to the experts, the dynamism and stability that REITs bring to a highly atomised market are indisputable. In purchasing buildings, they value select products based on location, repercussion and profitability. By type, REITs tend to invest in residential constructions for tourism, hotels, retail, large shopping centres and office spaces.
