The latest report from idealista.com (Q2 2015) reveals that the Yields on Spanish Real Estate assets have increased in the past year, with even the least profitable asset yield offering double the profitability of the 10 Year Spanish Government bonds (2%).
Commercial Real Estate
According to Idealista report, which looked at the sale and rental price of real estate to calculate the gross profitability, commercial premise is the most profitable real estate investment with a gross annual yield of 7.6%, up from 6.2% a year ago. The figures show that office space offers the best return on investment while garage parking the least with average yields of 4.6% at the end of Q2.
At the top of the list we find Cordoba (9.2%), followed by Granada (8.5%), Las Palmas de Gran Canaria (8.3%), Malaga (8.1%), Zaragoza (8%), Madrid (7.6%) and Barcelona (7.5%).
Returns on investment in housing for rent have also increased with a yield of 5.5% compared to 4.9% a year ago say Idealista.
Amongst the provincial capitals, Lerida offers the highest residential rental return with 7.8%, followed by Las palmas De Gran Canaria (6.2%), palma de Mallorca (5.8%), Huesca (5.7%) and Huelva (5.7%). Madrid and Barcelona respectively offering a return of 5% and 4.8%.
Table showing the Residential Rental Yields by Region
As discussed in our previous article (Yield Vs. ROCI), Yield is a good tool to assess the return on a property investment if you are a cash buyer, which is the case for 85% of the UK based property investors in Spain. If you finance your property purchase with a mortgage it is advised to use ROCI (Return On Capital Invested) instead.
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