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| Spanish property returns fell negative over 2008 Investment in Spanish commercial real estate returned -2.8% over 2008, according to the IPD Spain Annual Property Index. The figures are the first negative returns in the index's eight year history as well as a sharp reversal of fortunes from 2007's 12.9% return. Property significantly outperformed the equity market, which returned -36.5% according to the Sociedad de Bolsas Index. However, returns were someway behind bonds, at 9.7%, as measured by the JP Morgan 7-10 yr Government Bond Index. The worst returns came in the hard-hit Spanish Retail sector, returning -5.9%, followed by Offices, level with all property at -2.8%, and Industrial sector, which managed to post a positive return of 70 basis points. The returns were driven by the competing influences of negative capital value movements, with an all property average of -6.8%, and resilient income return, averaging at 4.3% across all sectors. Capital values falls, driven by yield widening, was most pronounced in the Retail sector, at -11.0%, followed by Offices, at -7.6%, and the Industrial sector, at -5.6%. Yields moved out in line with these capital value movements; Retail, Office and Industrial yields increased by 110bps, 60bps and 70bps, to end the year at 6.6%, 5.6% and 6.7%, respectively. While far from the lowest returns recorded on the Continent so far, Spain's total returns were lower than neighboring Portugal, which posted positive returns of 2.6%. By contrast, returns for the UK and Ireland last year, the hardest hit so far by falling capital values, were -22.1%, and -34.2%, respectively. write your comments about the article :: © 2009 Construction News :: home page |