Distressed bargains strengthen spanish commercial property

Opportunistic investors chasing cut-price prime commercial property in recession-hit Spain have helped push the sector's total returns into positive territory for the first time in two years, a survey has found.

Investment Property Databank research showed commercial real estate total returns for 2010 hit 4.9 percent, from 2009's negative return of 9.3 percent. It comprised a 1.2 percent fall in capital values and a 6.2 percent gain in income returns, IPD said late on Monday.

Retail property was the strongest performer, producing total returns of 7.7 percent in 2010, from minus 7.2 percent in 2009, with gains in both capital values and income returns. It was followed by offices at 1.9 percent and industrial at minus 0.6 percent.

In February, Reuters reported retail property investors were scouting around for distressed assets, betting that rising Spanish GDP would boost total returns by 2013.  

Source: Reuters/London South East