Grosvenor Group, the London based real estate investor and fund manager said commercial property prices in Spain must fall by a further 40 percent before the firm would consider buying again.
In a report by Bloomberg, Rafael Aviles, a director in charge of the Spanish interests of the firm, which is owned by the Duke of Westminster, said a recovery in prices could happen next year at the earliest.
He said: “The market will come back but, depending on area and property type, prices will need to adjust by as much as 40 percent before then.”
According to the report, Grosvenor has approximately €480 million of Spanish offices and retail properties despite having sold many assets since prices peaked three years ago.
Aviles suggested that Spanish banks were yet to start offloading assets taken in exchange for cancelling debt. He said: “The Spanish banks that took on real estate in exchange for canceling debt and have been sitting on the assets will recognize they have to sell them at realistic prices.”
According to figures from the Investment Property Databank (IPD), offices, retail properties and warehouses collectively lost 6.8 percent of their value in 2008 because of “lending restrictions” and “rising corporate debt levels”.
Grosvenor currently manages approximately £12.6 billion ($20.3 billion; €14.4 billion) of real estate across Europe, the US and Asia.