SPAIN suffered a seismic shock in October last year when Catalans voted for independence. Much like Brexit, it was a bitter and divisive referendum with added violence on the streets. The repercussions were swift. Madrid, which had declared the referendum illegal, dismissed the Catalan government and imposed central rule.

On the property side, there was an equally rapid reaction. “The real estate consequences were immediate, with non-Catalan Spanish owners selling their properties in the region,” says Emmanuel Virgoulay, managing partner of Barnes Barcelona where many sales were completed with discounts of up to 30% in late 2017. “Investors are going to come to Madrid because the market is safer”, Virgoulay told reporters in November, adding that there were four buyers for every home on the market in Madrid.

But by March he had modified his tone as the shockwaves subsided. There could, he said, be opportunities for buyers in Barcelona given the context.

Catalonia remains the richest region in Spain, it has a massive tourist industry and a growing high tech sector. For a lifestyle buyer and retired or semi retired ex-pats, Barcelona probably beats Madrid hands down. The fact that it is on the sea, with a huge boating community and superyacht marina, as well as access to prime beach resorts as well as mountains, lends huge appeal.

“Barcelona has a pull for lifestyle investors who are looking for a city on the beach. It attracts mainly Northern Europeans and local Catalan investors,” says director Rod Jamieson, of Lucas Fox, the luxury estate agency which opened in Barcelona in 2005.

Added to that, Barcelona’s vibrant cultural life equals and even surpasses that of Madrid. Barcelona above all perhaps is a brand and a jolly successful one – tourism is booming at all levels.

The growth of the luxury property market in both Madrid and Barcelona is nothing new. In Barcelona, at this end of the market things were going swimmingly in 2017 when the average price of homes Lucas Fox sold rose by 14 % to €830,000. Understandably, there is now unease.

“Some international buyers who were once considering Barcelona for a prime property investment are now more wary and have chosen Madrid as an alternative,” says Jamieson.

Floating above all this, and somewhat unscathed by the referendum, is yet another property buyer profile – the UHNW or Ultra High Net Worth.

Super prime developments, which have been making an appearance in Barcelona for a number of years, willprobably be least impacted by the failed Barexit.

One company leading the way in this sector is Squircle Capital, the independent investment firm behind Barcelona’s Mandarin Oriental hotel which has just unveiled its first residential project.

The building known as Francesc Macia 10, a 1960s Bauhaus style former office building in one of Barcelona’s best residential areas.

Acquired by Squircle in 2012, it was given planning permission for conversion to residential use and the facade was listed, making it one of Barcelona’s only modern listed buildings.

The challenge of converting this round building has been met by Brazilian architect Marcio Kogan of Studio MK27 who could have gone down several routes but elected to create a core containing concierge lobby, lifts, services rooms, laundry, wine store, around which are eight 360 degree apartments, including a 900 sqm duplex penthouse with 300sqm external space. There’s just one apartment on each floor and each has 55metres of windows. Those at the front overlook Barcelona’s prime residential area around Turo Park.

“I like the silent movie effect of the street scene beyond,” says Kogan who was involved in films early in his career.

There is also a spectacular pool and spa with the best ever gym and massage rooms designed by BassamFellows, who were responsible for furnishing all the communal spaces. With a background in developing the Mandarin Oriental Barcelona, Squircle’s directors did not feel the need to add branded concierge or spa services. “We come from the hotel industry so we are already obsessed with service,” says Jose Caireta, co founder with Daniel Castillo.

With a remote controlled gate and security men flanked by screens, the car park entrance is straight from James Bond. Retaining some of the original ‘brutalist’ concrete walls, and with a stone floor, the luxury parking areas are the work of Vincenzo De Cotiis.

Squircle decided at the outset to play for high stakes on this first development. Having seen that a market for premium products (and prices to go with them) certainly existed in the hotel sector, they decided it could work in property provided that they could offer something exceptional. So they made a massive tenfold increase in the amount of communal area that would normally come with an apartment property and furnished it with prime materials throughout: American walnut, brass, basaltina stone flooring and exclusive Tunisian marbles.

Almost before they knew it, Squircle had sold three of the apartments to local families who had seen the project unfold. The remaining were launched last week and already there’s interest in the penthouse. Only one apartment is finished, the remaining are shell and core so buyers can put in their own designs and you can have almost as many beds as you like if you add walls.

Kogan squirms at the thought. “I would never do this,” he says, somewhat theatrically. Of course there are semi-walls of sorts in his show apartment for privacy, but the whole is more like a circular ‘enfilade’ of rooms; there are no doors on the 360 degree tour.

Knight Frank, exclusive agents, quote euros 8milliion with an estimated fit out of euros 2million for the freeholds. At xxx per sqm, the to the xxxx sq metre.

” Barcelona is always in completion with Madrid. We were very worried initially by the referendum when prices fell by 20% but at our product level it makes less impact,” says Caireta. His latest project – rebuilding Barcelona’s marina and adding more berths for superyachts is indicative of his upbeat mood and perhaps a way to ensure more UHNW footfall..

Capital choice

The 150-year-old firm of estate agents John Taylor – a name synonymous with the luxury South of France property market – opened new branches in Spain last year. The firm expect the number of Ultra High Net Worth Individuals (UHNWIs) (which they define as people with assets above £30million) will shift to Asia within the decade but they also expect the Iberian Peninsula to be one of the areas that this class will target for property investment .

“The Iberian Peninsula is coming from crisis but is now a good place to buy,” said sales director Javier Marfany at the opening of the second Madrid office, citing stability, booming tourism, a low interest regime, higher employment and foreign demand.

The firm believes Brexit may affect London’s (where it calculates there are 374,000 UHNWs) standing in Europe.

The Brexit view is echoed by Lucas Fox Madrid. Director Rod Jamieson. “Madrid’s important financial sector base is being considered by several firms in the City of London as a viable option for relocation. “

But Squircle Capital’s Jose Caireta said that there was as yet no evidence of Brexit companies moving to either Madrid or Barcelona.

Notwithstanding, demand for property in the capital has been growing since 2014-15. Now some international buyers who had been considering Barcelona for a prime property investment were choosing Madrid as an alternative. In both cities such buyers looked for a minimum 3% yield and mid-long term capital gains.

“Buyers interested in Madrid are attracted by the fact it is
the 3rd largest European capital with an important business centre, has a vast historical and cultural offering with world renowned museums, architecture, theatres and they are usually real city lovers,” says Lucas Fox director Rod Jamieson.