According to new research released by CB Richard Ellis (CBRE), Spain has many of the qualities that are currently attracting investors to the UK commercial real estate market and, as a result, it is attracting an increasing share of the European property investment market.

Although in absolute terms the Spanish commercial real estate investment market has shrunk over the past 18 months, with investment activity totalling €1.85bn in H1 2009, CBRE believes the decline has been much less severe than that seen elsewhere in Europe. Therefore, Spain’s share of the total European market has more than doubled, from around 3% of the total in 2005/06, to 7.5% in H1 2009. This growth in market share indicates that investors - particularly opportunity funds - are already spotting value in the Spanish market.

An important driver of this investor interest in Spain is the relative speed with which the market has re-priced, as well as the availability of good quality investment product at those prices. Since the peak of the market in mid-2007, prime yields in Spain have increased by 2-2.25%. This compares to a European average rise of 1.36% for the same period, according to the CBRE All-Property EU27 Prime Yield Index.