La Manga Club reflects on the state of residential resorts in the Mediterranean

There is no better way to evolve in the right direction than to be in the company of the best. Only with the significant experience of the most qualified professionals behind you is it possible to design growth strategies that stand the test of time and adapt to the needs of the market. In the La Manga Club Properties Office we know how important it is for our business and, above all, for our owners, for us to keep abreast of what is happening in the resort real estate market. Buoyed by this certainty, last month a group of professionals from our resort travelled to Barcelona to attend the Mediterranean Resort Real Estate Forum, a gathering for reflection on and analysis of the real estate and tourism industry that took place from November 30th to December 2nd.

Key members of the La Manga Club team, headed by General Manager Jose Asenjo, attended the event, including the Sales Director of La Manga Club, Gonzalo Valdes; the Sales Director of Arum, Agustin La Rocca; and the Marketing and Communications Director of Arum, Elodie Casola.

Important real estate and tourism companies such as CBRE, BNP Paribas and Meliá attended as well, and the forum analyzed topics ranging from corporate social responsibility to the role of geopolitics in the Mediterranean in the stability of the real estate market. It also highlighted economic trends of interest to us, including buyers’ increasing inclination towards investments in resorts.

The second homes market was analyzed in the round table “Spotlight on the residential segment: Maximizing value in Mediterranean resorts”, led by Arum Group’s Agustin La Rocca and Gauthier Renaud of Orion Capital Managers under the moderation of Daniel Von Barloewen from Savills. With Spain at the forefront of destinations chosen for establishing a second residence – and not only as an investment or for relocation – some of the most important industry products were reviewed and their various value propositions analyzed: serviced apartments, locations, etc. Among the most interesting findings were those that derived from analyses of the British market, an important segment responsible for up to 49% of real estate purchases in other European countries in 2015.

Regarding the controversial issue of Brexit, participants pointed out that despite initial uncertainty and the 20% drop in the Pound, forecasts of recession have proved incorrect, with a 0.9% rise in investment and record growth in the level of employment in the sector. For experts, these figures align with the fact that British tourism has not been affected. In fact, the number of visitors from the UK rose 6% in August and 11% in September, and their level of spending also increased.

Among the financial trends to take note of, the Forum indicated that more properties are being bought with equity and fewer through mortgages. While between 1995 and 2011, 52% of purchases included mortgages, in 2015 up to 78% of real estate acquisitions were financed with personal resources. This showcases not only the economic capacity of the buyers, but also the trend towards purchasing somewhat less expensive properties.

The experience gleaned from being one of the veteran real estate resorts in Spain, coupled with the trends reported at the Mediterranean Resort Real Estate Forum, allowed La Manga Club’s managers to confirm some of the beliefs that our own experience had indicated: the English market continues to be important, despite Brexit, and there is increased interest in products like the Las Lomas flats that fall within the affordable luxury segment of the market.