Elbio Gomez, Director of Chapman Taylor in Madrid and Sao Paulo shares some thoughts on the market.
Current trends in Spain
Between 2002 and 2007 Spain showed higher growth in the real estate market than throughout the rest of Europe, however this growth was not sustainable and when the real estate bubble burst, the Spanish market had further to fall. As with any sector as broad as real estate, some suffered more than others. The greatest growth had been in the residential area and the legacy of unfinished, unsold or repossessed homes has now turned the banks into the largest owners of residential and land property. Thousands of homes stand empty and in the short to medium term, the situation is rather bleak.
The retail sector is different for several reasons. Although the lack of money does in general mean that in commercial terms business is slow, the market is mature and the right projects can take advantage of lower land costs, greater receptivity by local authorities to any development and generally lower construction costs. A retail project brings jobs and can be seen to be of benefit to the area where it is situated. Spain can be considered to be in the heart of Europe and experienced developers realise that the right project can benefit the possibilities of the moment.
The future for Brazil
Brazil is a large and growing country with a population of nearly 200 million. It recently became the sixth largest economy, replacing the UK. The government is tackling major infrastructure work in the short term, mainly due to two major world sporting events, the World Cup in 2014 and the Olympic Games in 2016. The population has grown in consumer security and commercial development in such a politically stable environment offers many opportunities. We set up an office in Brazil in 2009 as a consequence of the continuous search by our practice of exploring new markets that show the possibility of sustainable growth. In the short term we manage much of our Brazilian work from the Madrid office but are waiting for our next commission in order to send our first team to Brazil.
You can read more about Chapman Taylor’s expansion into Brazil in their new 2012 Achievements Magazine, available on their MIPIM stand at 26.02.
Top image credit : Photobank gallery