Santander's sale of Spanish property is indicative of broader movement in the real estate sector.

Santander’s sale of Spanish property is indicative of broader movement in the real estate sector.

Movement in Spain’s real estate industry has been brisk for the past 24 months at least, with the residential housing market particularly buoyant thanks to the cash and activity of private buyers…

But for a long time now, since the crash of 2008, Spain’s banks have been the country’s largest portfolio holders, forced to hoover up the homes and offices of people and companies that defaulted on their mortgage payments during the credit crunch.

One bank in particular – Banco Popular – became Spain’s largest landlord in a matter of months, finding itself the owner of €30 billion worth of real estate based on pre-crash prices.

But that bank’s financial troubles were well known, and it was bailed out earlier this year by fellow Spanish bank Santander. This week, in a move that had been widely expected but is nevertheless a head-turner, Santander sold all of its control of property for €10 billion to US investor Blackstone Group.

This portfolio comprises hundreds of houses, apartments and hotels, and vast tracts of land, too, and has collectively lost two-thirds of its value since 2008, analysts say.

Now, though, it is in the hands of a committed and proactive investor in Blackstone Group – a company that has long viewed Spanish property as a long-term, profitable bet – and the deal is being celebrated in many quarters as yet more confirmation of the renewed enthusiasm for Spanish property.

Aside from a sharp increase in transaction activity for resale properties, residential construction in Spain is springing back into life, with foreign investment driving much of the activity.

According to Reuters, construction and real estate accounted for more than one-third of the €22 billion direct foreign investment in Spain in 2015 – a figure that is likely to be higher for 2016 and 2017, once official data is available.