Ibiza Real Estate Market and Investment Insights June 2023

 

The Ibiza 2023 season is now underway, the year so far has started strongly with record year to May visitors and record year to date spend.

New venues and hotels still opening on the island and expectations are for the most part positive for this year.

Our perception is that last year saw a strong bounce back out of the pandemic, with a perceived heavy dose of ‘vengeance vacationing’ and where price was not an issue.  Shortfalls in service and even value for money often overlooked and mostly forgiven!

Prices across the board increased sharply on the back of inflation, higher rates, strong demand and higher input costs especially food energy and electricity.

This year if we had to highlight and overriding sensation from our visitors and from the market in general is that not everything goes. Value for money and price sensitivity is a big player this year.  It remains to be seen what the overall impact will be.

Our bet is a simple one; supply has increased in the higher echelon space, so more on offer. Demand is likely to wane over the peak months both in terms of visitors and a more cautious consumption searching for better value for money propositions which now have become scarcer.

Many hotels,restaurants and venues will need to look closer at pricing and quality of delivery.

Inevitably this will lead to a downward adjustment in pricing and more attention to overall service. This cleansing will be ultimately good for the island.

We must nurture our visitors carefully and pay more attention to the overall value propositions the island has to offer. Ibiza is a premium destination and very likely to stay that way but pricing has to be more aligned with the experience. Nobody wants to feel they are being taken for a ride!

What happening in Ibiza these days ?

Some more movement in the hotel space

The Banca March though an 80/20 joint venture with the Melia hotels International has acquired the Sol Beach House in Ibiza operated by the Melia group. The hotel was purchased for an undisclosed sum from the Starwood Capital fund.

This new retro chic hotel inspired by the Italian Riviera of the ‘dolce far niente’ 60’s, will be opening this summer under the management of the Concept Hotel Group, based in Ibiza. The hotel was formerly known as the Palladium Hotel don Carlos which was sold by the Matutes group to Stoneweg an Bain Capital for €30mm in 2022. Mongibello has 168 rooms including 32 themed suites, access to the beach and the restaurant Signature will be managed by the Parisian group El Silencio who also manage the beach club in Cala Moli.

The Somni Dream hotel has been inaugurated this season right on the beach of Cala Sant Vicent. This 5 star 105 bedroom is operated by theMallorca based Grupotel. The Ramis family bought out the 50% TUI stake in Nordotel in 2021. The group have 46 hotels in the Balearic & the Canary Islands, with some 9000 rooms and 20,000 beds.

A couple of international brands land on the island

Designed by The MAINE’s Founder, Joey Ghazal, the 18th century ‘white washed’ parish has been restored to feature vintage Spanish Colonial pieces sourced from mainland Spain, amongst a beautifully curated garden. MAINE Ibiza will also open through the day, offering a blackboard menu of vibrant, healthy bowls, vegetarian & vegan options, and Mediterranean market platters using all fresh and locally sourced produce. With three restaurants in Dubai, and its first international outpost in the heart of London’s Mayfair, which opened in 2021, the brand is now looking to conquer another European hot spot, opening on the famed White Isle in June.

Founded by Arkady Novikov, the group initiated its international expansion in 2011 with the opening of its Mayfair restaurant, Miami, Sardinia, Doha, Bodrum, Istanbul & Jeddah followed and now opening Ibiza. The Pan Asian restaurant is neatly nested into one of the corners of the luxury Ibiza Gran Hotel in the heart of Ibiza Downtown.

A new Beach Club Playa Soleil

Playa Soleil, a collaborative project between the teams behind Ushuaïa and Hï Ibiza, as well as the lifestyle company that includes ROTO and Beso Beach, will be set in a beautiful beachfront on the legendary Bora Bora beach club site.

Lets check some of the recent figures for the real estate market

We have to mention a few words about politics…

So this past May 28th we had local, insular and autonomous government elections with a sweeping win for the center right PP party. The Partido Popular won all the municipalities in Ibiza, renewed the insular government the Consell and won the autonomous election the Govern.

Let now see what happens in the general election on the 23rd of July tihs summer. Polls show the PP in the lead comfortably but without overall majority and may have to negotiate with the hard right party VOX, to govern. But polls are just that, polls, and the governing socialist PSOE are now hot on the electoral trail, fighting back hard.

On paper this is market friendly and should support investment, alleviate bureaucracy and generally facilitate business.

They now must address the significant problems around housing, infrastructure and transportation. They have generous budgets, loads of cash in the bank from previous legislatures and no opposition. Importantly they also have no excuses. Fingers crossed!

Institution	2023 Budget €
Consell d’Eivissa	120.200.000
Ibiza	76.700.000
Santa Eulalia	52.170.000
Sant Josep	47.923.000
Sant Antoni	31.400.000
Sant Joan	11.050.000

Keep your eye on…

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Something has got to start moving around these venues at some point

Ibiza this month in the press

Next Issue July 2023