After Wang Jianlin, chairman of China's richest company Wanda Group, acquired the landmark "Edificio España" in Madrid for 260 million euros, the news quickly drew attention from some in China regarding buying the dip in the Spanish real estate market. Many who were already interested in Spain's "residency by investment" policy have now begun to turn their interest into concrete action following this news. In this regard, Spanish real estate professionals hope that, driven by Wang Jianlin's move, the number of Chinese buyers can reach new heights beyond the current level.
Wang Jianlin's Acquisition Creates a Call Effect
Wang Jianlin is a well-known figure in China's real estate and sports industries and is a household name in China. After the Wanda Group he leads bought the "Edificio España" next to the Plaza de España in the center of Madrid, the news spread rapidly in China and caught the attention of many who were already following the Spanish real estate market.
As a shrewd and successful businessman, Wang Jianlin's large-scale investment in Spanish property will undoubtedly attract others to follow suit. In this regard, a real estate agency in Madrid stated that since the news of Wang Jianlin's purchase of the Edificio España spread, they have seen a continuous increase in inquiries from China regarding the Spanish property market. At the same time, some clients who were previously on the sidelines have decided to sign up for property viewing tours, hoping to visit Spain in the near future to conduct on-site inspections of the real estate market.
Wang Jianlin dared to invest heavily in Spain because he must have conducted thorough research on the local real estate market and seen the huge potential profits before taking action. This is something that most small and medium-sized investors cannot achieve. Therefore, Wang Jianlin's move serves as a "beacon," indicating that the time to buy the dip in the Spanish property market has arrived.
With the continuous increase in inquiries and registrations for property tours brought about by the "Wang Jianlin Effect," in fact, Wang Jianlin and his Wanda Group are not the first well-known Chinese companies or individuals to enter the Spanish real estate market and related industries. Previously, China's Hainan Airlines and Greenland Group had already acquired equity or entire assets of several well-known Spanish hotels through methods such as share acquisitions and asset swaps, fueling the promotion of the Spanish property market. Consequently, the call effect caused by Wang Jianlin's building purchase has gained even stronger momentum. Today, Wanda, HNA, and Greenland have become the "three musketeers" for agencies promoting the Spanish property market in the Chinese market. The call effect that these "three musketeers" have brought to "buying the dip in Spain" due to their own fame is quite powerful.
Industry Confidence Among Chinese Buyers Increases
Since Spain announced its "residency by investment" policy, Chinese citizens have become the primary target for this policy. To date, many Chinese have successfully obtained Spanish investment visas. Now, after Wang Jianlin's large-scale investment in Spanish property, the confidence of the Spanish real estate industry in the Chinese market has been further boosted. In this regard, some real estate professionals hope that the number of Chinese people coming to Spain to buy property will increase exponentially, riding the wave of Wang Jianlin's purchase.
In fact, various Chinese investments in Spain have been growing steadily in recent years. According to data from the Ministry of Commerce of China, China's investment in Spain has tripled in the last three years. However, this figure does not represent the total amount of Chinese investment in Spain, as much of it is conducted through third countries or other regions, such as Luxembourg and Hong Kong. Among China's investments in Spain, real estate investment accounts for a significant portion, especially after Spain passed the "Entrepreneurship Law," with more and more Chinese coming to Spain for "residency by investment." According to the latest statistics from the Spanish Ministry of Foreign Affairs, Chinese citizens account for 24% of the "residency by investment" visas currently issued by Spain.
It is reported that in the first three months of this year, Spain issued a total of 661 "residency by investment" visas. Of these, 24% were issued to Chinese citizens and 20% to Russians. In addition, since the implementation of the "Entrepreneurship Law," 25 Chinese citizens have obtained special residency permits due to real estate investments.
The Spanish government and the real estate industry are not satisfied with the current trend of Chinese property purchases in Spain. They are still working hard to attract more Chinese buyers to Spain. According to a document provided to reporters by Spanish real estate professionals, data released by the Spanish Ministry of Development on February 27 shows that since the first quarter of 2008, the average housing price in Spain has fallen for 23 consecutive quarters. In the fourth quarter of 2013, the average housing price in Spain was 1,466.9 euros, an average decline of 4.2%, which is a 30.2% decrease compared to the 2,101.4 euros six years ago. In other words, current Spanish housing prices have fallen to levels lower than those in 2005. Such low prices are very attractive to overseas investors in Spain. Therefore, they believe that shrewd Chinese real estate businessmen and investors will surely see this as well.
In addition, housing prices in some regions of Spain have begun to show an upward trend; for example, prices in Madrid, the Balearic Islands, Galicia, and the Canary Islands have begun to stop falling and are rebounding. Thus, now is a good time to buy the dip in the Spanish property market. Therefore, in the eyes of some Spanish real estate professionals, Wang Jianlin's massive investment in property this time can be described as a wise move that seized the right moment.