The real estate sector is the focus of most of the M&A transactions in the Spanish market. According to data from Transactional Track Record, between January and November 2022, real estate mergers and acquisitions worth €12.78 billion have been announced or closed, 65% more than in the same period last year. In total there have been 266 deals, 15% more than in 2021.
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40 OPERATIONS IN NOVEMBER ALONE
January remains the most active month for transactions in the real estate sector, but November closed with some remarkable figures. Over the course of last month, a total of 40 transactions totalled an aggregate amount of 1,446.49 million euros.
One of the most important was the incorporation of the new joint venture Wellder Senior Assets, born from the merger of Renta Corporación and APG. The company was created with an initial capital of 125 million and a target leverage of 50%, which should allow for an investment in assets worth 250 million.
A SECTOR ATTRACTING THE INTEREST OF FOREIGN INVESTORS
Outside Spain, France and the United States are the main destinations for investments in the Spanish real estate sector. In total, so far this year there have been 23 operations in these countries. However, the one with the largest accumulated amount is Canada, with 1,268 million euros.
In the other direction, the United Kingdom and the United States are the countries that invest most in Spanish brick, with 28 and 27 operations respectively. If we look at the amount invested, the main investor is Germany, with 1,144 million.
THE PROPTECH BOOM: REAL ESTATE TECHNOLOGIES
Spain is a world power in the real estate sector, and it is also showing a lot of muscle in the technological field. Last year it was already the second country globally that received the most investment in technology companies in the real estate business, the so-called proptechs. According to the study Proptech Global Trends 2021, prepared by ESCP Business School in collaboration with the Principality of Monaco, Spanish real estate startups attracted 856 million euros in 2021.
This figure exceeds that of leading countries in technological development such as the United Kingdom (€799 million), India (€771.7 million) and Germany (€215 million). Only the US proptech market, with transactions worth €6.1 billion, is larger than the Spanish market.
Digitalisation has come on fast: five years ago there were 50 proptech companies in Spain and today there are more than 500, with the consequent atomisation of the market that this entails. When a new sector begins to attract large amounts of investment, mergers and acquisitions soon follow.
FOCUS ON PROPTECH BEGINS
Back in April, Med Capital launched a fund to invest in proptechs. Med Capital Venture Fund I is the largest investment fund in the proptech sector, with €25 million to take small positions in disruptive companies in the Spanish real estate sector that facilitate real estate transactions and improve construction, maintenance or asset management systems.
Another example is the Finnish proptech company Rive (formerly kodit.io), which after acquiring the Spanish company Lucas in 2021 is accelerating the growth of its business of buying and selling second-hand homes in Spain. To this end, it has just closed a €23 million financing round, led by IDC Ventures, along with other investment funds.