Recovery for Spanish commercial property 'may take more than a year'

The Spanish commercial property sector is likely to take longer than 12 months to recover, new research has suggested.

Bloomberg Businessweek reported on data published by Savills, which stressed that a lack of finance coupled with the wider European debt issues will slow the market's recovery.

According to the firm's figures, investment in Spanish commercial real estate is now at its lowest level since 2001, with just €1.25 billion (£1.1 billion) in deals concluded in the first nine months of this year.

This represents a 52 per cent drop over the same period in 2010, with the news provider noting that a lack of funding from Spanish banks is deterring investors.

Managing director for Spain and Portugal at RREEF - the real estate investment division of Deutsche Bank AG - Ismael Clemente agreed with this sentiment.

Speaking to Bloomberg, he stated: "Pressure on Spanish sovereign debt is pulling back investment. A lot of the big property deals that have come up this year have been canned because of a lack of financing."

Earlier this month, a report published by BNP Paribas Real Estate found that the retail property market in Madrid has low growth prospects for the rest of 2011 and into 2012, with investment volumes in the sector falling during the third quarter of this year compared to the same period in 2010.
 

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