Mergers and acquisitions in the Spanish real estate sector increase by 65%
A large part of M&A activity in the Spanish market is currently focusing on the real estate sector. According to Transactional Track Record data, between January and November 2022 the value of completed or announced deals in the real estate sector amounted to EUR12,780 million- 60% higher than during the same period in the previous year. There has been a total of 266 transactions, 15% more than during 2021.
40 DEALS IN NOVEMBER ONLY
January remains the most active month for real estate transactions, but November brought very considerable figures too. During November 2022, a total of 40 deals amounted to a combined value of EUR1,446.49 million. One of the most prominent was the formation of new joint venture Wellder Senior Assets, between Renta Corporación and APG. The company´s initial capital of EUR125 million and 50% leveraging target should allow for EUR250 million investment in assets.
A SECTOR WHICH ATTRACTS FOREIGN INVESTMENT
Outside of Spain, France and the US are the main investment destinations for companies in the Spanish real estate sector. 23 deals were completed in these jurisdictions during 2022, although the country which saw the largest investment volume was Canada, with EUR1,268 million.
On the other hand, the UK and USA are the most active markets in terms of incoming investment, with 28 and 27 deals respectively. In terms of volume, Germany has received the largest amount of investment, amounting to EUR1,144 million.
THE PROPTECH BOOM
Spain is a global power in the real estate sector, and also a strong player in the technology arena. In 2021, Spain was the second country globally in terms of inward investment in proptech. According to Proptech Global Trends 2021, a report by ESCP Business School in partnership with the Principality of Monaco, Spanish real estate start-ups received EUR856 million during 2021.
This figure is higher than the amount received by countries which have traditionally led technological development, including the UK (EUR799 million), India (EUR771.7 million), or Germany (EUR215 million). Only the US proptech sector, with transactions amounting to EUR6,100 million, is larger than the Spanish market.
The accelerated pace of digitalisation in the Spanish market has seen proptech companies increase from 50 five years ago to 500 today, which translates into a fragmented market. When a new sector begins to attract large amounts of investment, mergers and acquisitions tend to follow.
THE CONCENTRATION OF THE PROPTECH MARKET
Back in April, Med Capital launched a proptech investment fund. Med Capital Venture Fund I is the largest investment fund in the proptech sector, with EUR25 million which will be used to take small stakes in disruptive real estate companies which make real estate transactions easier, or improve construction and maintenance systems and asset management.
Another example is Finnish proptech Rive (formerly kodit.io), which is accelerating the growth of its Spanish second-hand property sale business following its acquisition of Spanish corporate Lucas in 2021. To this end, it has just closed a EUR23 million financing round with other investment funds, led by IDC Ventures.