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Mallorca Real Estate Draws Foreign Investors

Stately mansion to become luxury dwellings

featured in Property news Author Trine Bregstein, Mallorca Reporter Updated

In the heart of luxurious Palma on the Passeig del Born, known locally as the Golden Mile, a real estate sale to the tune of €5 million, has just been brokered by Solvia-Banco Sabadell.

The 15th century building “Can Puig” has been purchased by a British company and according to sources close to the transaction the plan is to convert the stately mansion into 5 luxury dwellings. This is the most substantial purchase in the area during this economic crisis. Those in the construction and real estate sectors see this as part of a growing trend of emblematic Mallorcan property and iconic buildings becoming the object of desire of wealthy foreign investors.

In the last few months Deloitte have noticed a growing demand for business and commercial premises along with hotels on the island. Alexander Grau, director of Solvia-Banco Sabadell in the Balearics, said a month ago that an increase in confidence among investors seeking unique assets on the island has been detected. This increase in confidence and purchases has led to an increase in sales prices and this means that along with Madrid, Mallorcan commercial premises are amongst the most expensive in Spain.

According to the Land Registry, 18% of real estate sales in 2013 had foreign investment funds as backers and if you were to include foreign individuals that would mean one in every three real estate purchases is backed by foreign capital, this is the highest rate of foreign investment in Spain. This influx of investment and demand by foreign buyers has increased the value in certain areas, meaning that the average value of the commercial square metre in Mallorca is €1860; the Spanish average is €1420 per metre. Commercial property values fell 2.5% last year in Spain, but on the Balearic Islands it rose 8.4%. 

The best property is being snapped up in Palma, the commercial zones of Alcúdia, Andratx and Calvià, and the investments are reportedly coming from Britain, Germany, Scandinavia as well as Asia and the Middle East.  

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