Servihabitat launches ServInvest, a new service for investors who regard real estate as a safe investment
- The Bank of Spain places real estate profitability at + 6.9% for the first quarter of 2020, well above other investments that presented flat or negative return ratios, such as the Spanish 10-year bond (+ 0.8%), investment funds (-5.3%) or the Ibex-35 (-26.6%).
- Analysis of the last ten years confirms that rental property, with an average 5.4% return, is a more profitable and considerably more stable commodity than other standard financial products, which have proved to be more volatile and offer lower yields.
- In Europe, real estate investment saw a 15% year-on-year increase during the first quarter. Early indications suggest it will return to this robust performance post-Covid-19.
- First-quarter investment interest was already looking positive, with tertiary sales increasing to 1.65 billion, an upward trend that is expected to continue in the coming months.
Barcelona, June 18, 2020.- Servihabitat, a leading multi-client and multi-product servicer for the management of real estate and financial assets, has launched ServInvest, its new personalized service channel aimed at investors or retail buyers opting to take refuge in the real estate sector for a stable return on their investments.
This market, which, in 2019, set a new record for direct investment in real estate assets with transactions worth more than 12 billion euros, is generating interest among a public with good levels of liquidity seeking investment opportunities in quality assets. The trend was confirmed by the first quarter of 2020, which saw real estate attract an overall investment of more than 2.25 billion euros, a figure that surpassed data from recent years and which is expected to increase in the coming months. Investment in the tertiary sector (offices, retail, logistics, and hotels) accounted for more than 1.65 billion euros.
The dual advantages of attractive profit margins and comparable stability are attracting numerous investments at a time of exceptional volatility. While real estate returns have enjoyed a 6.9% growth in the first quarter of this year, other investments are presenting flat or negative results. The Spanish 10-year bond, for example, achieved a 0.8% return during the first three months, investment funds fell by an average 5.29%, pension funds by 5.40%, and the Ibex-35 by 26.6%.
A 10-year analysis, which is more typically used to evaluate the return on these types of investments, shows that while real estate has presented stable margins oscillating between 4 and 7% and with a post-2010 average of 5.4%, yields from other investment products have varied dramatically from year to year and, in addition to higher volatility, their average profitability for the ten-year period is significantly lower than that of the letting market. Pension funds, for example, have provided an average 2.8% return over the last decade, investment funds 1.5%, the Ibex35 has dropped -3.52% since 2010, and the German ten-year bond has achieved an average return of 0.88%.
*Data from Inverco / Bloomberg and real estate portalss
In the real estate sector, despite the impact of the current crisis, the economic outlook is vastly different from that of 2008, which was a scenario with far more debt and much less liquidity. The exceptional circumstances brought about by the Covid-19 crisis led to a temporary halt in contract completions. However, investor interest in the sector has grown, thanks to its reputation as a safe-haven asset, which, compared to other financial products, offers reasonable returns and less exposure to the volatility of stock values. According to Juan Carlos Álvarez, Asset Management Business Manager, “if, as early indications from the de-escalation suggest, the market bounces back fairly quickly, real estate will continue to be a profitable alternative for investors, just as it has been in recent years".
Servihabitat’s data identifies residential housing as the most appealing market for this type of investor, which, for the most part, are private individuals with up to 3 million euros to invest. This market is followed by the logistics market and land purchases.
Álvarez points out that “within the residential sector, the upward trend in the rental market appeals to all types of investors who can achieve average gross returns of around 4%, or up to 9% for properties in prime locations or secondary markets”.
Servihabitat, with nearly 180,000 real estate assets under its management, has profiled the most active investors in this field and established that the majority are based in either Madrid or Barcelona. The new service is part of the company’s efforts to go one step further in focusing not only on the product but also on the relationship with the investing client, given that the overall objective is to advise and respond to their needs.
A tailormade service
The new Servihabitat proposal offers the investor, whether professional or not, a uniquely personalized customer-service relationship, which is maintained over time, thus creating a lasting bond with the client.
With ServInvest, the investor will no longer have to search for their products. Instead, the company will be responsible for finding, selecting, and presenting the most suitable opportunities to each client, according to their individual investment interests and with the support of Servihabitat’s wholesale and retail teams, which will also be available to investors.
The client can request investment opportunities in any type of real estate asset: homes, premises, offices, buildings, structures, warehouses, land and, of course, debt - a market that some analysts value at 85 billion in our country, and which is expected to grow by up to 40% this year.
To access this new service, the investor simply completes an online form on the Servihabitat website: https://www.servihabitat.com/en/propertyinvestment/ to indicate their investment preferences. The ServInvest team will then contact the client to discuss their investment objectives in more detail, and within a matter of days, they will receive a bespoke product dossier. Clients will be allocated a single Servihabitat contact, who will work with them, while keeping the dialog as brief and uncomplicated as possible, to centralize all their requirements, referring, when necessary, to the wholesale and retail specialists.
Servihabitat is the leading multi-client and multi-product servicer provider for the comprehensive management of mortgage and developer portfolios, as well as real estate assets. The company’s thirty years of market experience and the high volume of assets under its management consolidate its position at the forefront of the sector.
A multidisciplinary and highly qualified professional team, management excellence, marketing power, technological innovation, and a quality service tailored to the needs of each client all unite to make Servihabitat a strategic partner capable of providing diverse solutions throughout the asset management cycle.