January 27, 2011 / 2:42 PM / 8 years ago

Spanish property market set for recovery -IVG

* Spain market seen picking up later in 2011 - IVG

* Warsaw, Stockholm, Helsinki market growth potential

* London’s West End likely to remain unattractive

FRANKFURT, Jan 27 (Reuters) - Spain’s real estate sector is likely to recover faster from the debt crisis than its wider economy, with low rents increasingly attracting demand, market research conducted by German property group IVG IVGG.DE showed on Thursday.

“Theoretically, the real estate market always follows in the steps of the wider economy, with a delay of around 18 months,” IVG’s corporate social responsibility and research head, Thomas Beyerle, told journalists at a news conference in Frankfurt.

“With Spain it is likely that we will see a case of reverse psychology,” he added.

According to data provided by IVG, rents in Spanish cities such as Madrid and Barcelona have fallen more than 40 percent since the fourth quarter of 2008.

“Although rents will likely continue to fall in early 2011, they will soon pick up,” he added.

Thanks to the volatile nature of the market too, these markets are likely to recover quickly from current lows, Beyerle said.

Through 2011, Warsaw, Stockholm, Helsinki and major German cities such as Berlin, Frankfurt, Munich and Hamburg will also prove to be attractive locations in the rentals market, especially in the office sector, he added.

Rent in these cities is forecast to climb by between 2 and 7 percent, with yield compression increasing slightly.

London’s West End, on the other hand, will see less yield compression and rental growth of around 9 percent, making it an expensive and relatively unattractive market. (Reporting by Josie Cox; Editing by David Holmes)

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