“I am the mountain, I am the sea,” sings Simon Neil on Biffy Clyro’s 2009 hit single, Mountains. Whilst unlikely to be the inspiration for the song, Neil could have been referring to Barcelona, which is sandwiched between the sea and mountains. This setting creates a scarcity of land and, on top of this, the supply of good quality, affordable properties is low when set against the strong demand in the city.
Barcelona, therefore, is ripe for investment. It is also a digital innovation hub, with PATRIZIA ranking the city #12 out of 142 for innovation in the PATRIZIA European City Pulse Index. Barcelona is an attractive city for students and a young workforce, so the demand for housing isn’t likely to disappear soon. “Barcelona is tight on housing supply thanks to a rental cap, which stunts development and limits the number of homes to rent,” explains PATRIZIA Country Head – Spain, Rita Torres. “However, the city’s stunning architecture, relaxed Mediterranean atmosphere, and great food, combined with its reputation as a dynamic digital hub, will continue to attract investors to the real estate market.”
This view is shared across the business with PATRIZIA this year securing two major deals in Barcelona, which will go some way to alleviate the housing pressure in the city. The first, completed in January, is a circa EUR 600 million investment on behalf of its clients in a high-quality residential portfolio. The portfolio of 10 newly built assets comprises 1,479 residential units in total, making it one of the largest-ever residential transactions in Spain.
The built-to-rent scheme is a rarity in Barcelona and, indeed, Spain, boasting a full amenities package including a fully equipped gym, a co-working area, a common area for tenants, a swimming pool and electric charging facilities for bicycles and cars. The apartments are fully furnished and there are plenty of smart building features, such as keyless entry into the building and smart meters. Whilst high quality, the apartments are also affordable, with most rents between EUR 1,000 and 1,600 per month.
PATRIZIA Fund Manager Sebastian Dietert, who oversaw the investment, comments: “Barcelona offers stable income return and long-term capital growth. For connectivity and innovation alone, Barcelona consistently ranks very highly in our PATRIZIA European Living Cities Report, which measures almost 150 cities also for their affordability and liquidity, helping clients develop a truly diversified European residential portfolio. The same report designates the city as ‘powerful’ due to its size and the significant role it plays in the daily life of its nation. And yet, Barcelona is undersupplied and underdeveloped for attractive build-to-rent schemes.