Spain puts property on block in bid to replenish its coffers
Some 15,000 properties, from office buildings to agricultural land, will be put up for sale over the next seven years.
The measure is the latest in a series of moves to bring Spain's budget deficit to within the EU target of 3 per cent by 2016 from 7.1 per cent of GDP last year.
Spain's government has introduced a number of unpopular austerity measures as the nation struggles with its sixth quarter of negative growth and an unemployment rate of nearly 27 per cent.
A parliamentary commission has drawn up an extensive list of assets that will be sold to private investors.
They include disused army barracks, an airfield on the island of Minorca, a military shooting range and thousands of office buildings.
The government said the portfolio would include about 10 buildings, considered unique, that it hoped would be snapped up by potential investors.
Among those is a mansion on Madrid's central avenue, the Paseo de la Castellana, that used to house the secretary of state for security, and a country estate in Andalusia comprising 14,164 hectares of natural parkland planted with cork trees.
Mariano Rajoy's conservative government announced plans last year to set up a commission to draw up an inventory of all state-owned property and identify those that could be sold.
The first properties to go under the hammer include the former headquarters of RTVE, Spain's state television and radio channel in Madrid and Galicia, and a disused army barracks in Seville.
"There will be some real gems in the portfolio, I am sure, but also a lot of dross," said Mark Stucklin, founder of Spanish Property Insight, an independent website.
"Those properties that will be sought after are those of historical or architectural interest in the most sought-after areas of cities. But it will boil down to the price. There will always be interest in good real estate by foreign investors if it is sold at a bargain."
The government is yet to release the full portfolio of properties for sale and has not said how much money it hopes to raise.
Much of the rural property that will be put on the market will be offered with the opportunity for development to create local jobs.
La Almoraima, a country estate in the Natural Park of Alcornocales, which has been managed by the ministry of environment since 1983, is being sold with the option to develop a resort with two golf courses and a five-star hotel.
"We will wait for a reasonable offer - we are not going to sell it off for peanuts," a spokesman said.
"Our best hope is that we can generate foreign interest as there are few in Spain right now who could afford it."
Frequently Asked Questions about this Article…
The Spanish government has approved a plan to put up about a quarter of its state-owned properties for sale — roughly 15,000 assets over the next seven years. The portfolio ranges from office buildings and agricultural land to disused army barracks, an airfield, a military shooting range and some unique buildings.
The sales are intended to raise hundreds of millions and help refill Spain’s empty coffers as part of measures to reduce its budget deficit. The move is one of several steps aimed at bringing Spain’s deficit down toward the EU target of 3% of GDP by 2016 (it was 7.1% last year).
The government says the portfolio includes about 10 unique buildings. Named examples in the article include a mansion on Madrid’s Paseo de la Castellana, a 14,164-hectare country estate in Andalusia (La Almoraima) planted with cork trees, the former RTVE headquarters in Madrid and Galicia, and a disused army barracks in Seville.
Yes. Much of the rural property will be offered with the option to develop in order to create local jobs. For example, La Almoraima is being sold with the option to develop a resort with two golf courses and a five-star hotel.
A parliamentary commission drew up an inventory of assets to be sold, but the government has not yet released the full portfolio or said how much money it hopes to raise. The assets are expected to be put up for sale over the coming seven years.
The article notes there could be strong interest from foreign investors, particularly for properties of historical or architectural interest in sought-after city areas, if prices are attractive. A government spokesman also said they hope to generate foreign interest because few buyers in Spain can currently afford such large purchases.
Yes. Mark Stucklin, founder of Spanish Property Insight, warned the portfolio will contain “some real gems” but also “a lot of dross.” For everyday investors, that means opportunities will exist but careful selection and attention to price and condition will be important.
Investors should watch for the government’s full portfolio release and auction details, focus on location and development potential, be mindful that price will drive interest, and recognise that the collection will include both high-quality and less-desirable assets. The timeline (properties sold over seven years) and the possibility of development-linked sales — like La Almoraima — are also key factors to consider.
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