Why would anyone choose to invest in Valencia, only the 3rd largest city in Spain, instead of the far more famous Capital or the home of the Sagrada Familia? Well, quite simply – because they know a few important things that make Valencia a must for any aspiring entrepreneur or astute investor in real estate. There are plenty of opportunities in enterprise, whether we’re talking about start-ups, new, established, or even multi-national companies. And the housing market is in an excellent state right now, with prices still reasonable, yet set to continue a positively upward trajectory.
Let’s get down to business
Valencia has a great blend of international companies, and even SMEs, with a good percentage of them having been established by entrepreneurial expats on the look-out for a chance to set up their own business. You have only got to look at the neighbourhood of Ruzafa for a great example, probably the most dynamic in the city. This was once a forgotten part of Valencia until the expat community realized the massive potential of the area. Read more on this in The best areas to live in Valencia as an expat. The city itself is the hub of the hustle and bustle of commerce, with roughly a third of companies in the province located in its capital. Valencia also hosts some truly global players; blue chip multinationals such as Apple, Ikea, Ford, Hewlett Packard and Plug and Play, which has its European headquarters, just outside the city, in Paterna. Valencia has approximately 400 foreign companies; this is an increase of about 19% since 2008, which continues to rise, as many more realise the benefits of investing in Valencia.
Valencia has truly grown into a world- renowned centre for international trade. With exports and Imports having grown by over 37% in recent years, it’s little wonder its port is the busiest in Spain. Many international events are held here too – Valencia holds the 3rd highest number of them staged by a European city which is not a capital. The major centres include; the world famous, Calatrava designed City of Arts and Sciences, the Palau de la Música, the Palau de Congressos, which won world’s best conference centre in 2018, and the Feria de Valencia, which holds massive, international trade fairs.
A well-educated workforce
If the right education is the key to a well- trained employee, then Valencia certainly fits the bill. Neary 17,000 students obtain university qualifications every year in Valencia; and In the University of Valencia and the more tech-orientated UPV, The Polytechnic University of Valencia, the city has 2 of the top 10 universities in Spain. The UPV has indeed helped enormously with the city becoming vey ICT friendly. Both have excellent industry links, supplying a highly skilled and in-demand workforce, with an eye on future job market needs. But because Valencia is not Madrid or Barcelona, with their overly abundant job advertisements, it is often easier to find these well-qualified, much sought after employees. And, as an added bonus for any prospective employer, because the cost of living is relatively cheaper, especially in terms of rent, this may have a knock-on effect on the wage bill, thus helping any ambitious company to grow faster by being more able to afford new employees.
Progressive Local Government
Whilst both the Madrid and, especially the Barcelona local governments have been embroiled, lately, in all kinds of political arguments and confusion, the local mayor, Joan Ribó, has been quietly going about improving the daily lives of the citizens of Valencia. Typical of the improvements to city life is the pedestrianization of the town hall square the ‘Ayuntamiento’, due to take place on the 20thMarch, 2020, the day after Valencia’s main, and absolutely spectacular festival Las Fallas. This will lead to about 12,000 m2 of space more to walk around and enjoy its historic monuments. And another impressive fact is that Valencia was elected World Capital of Design on October 11th, 2019. The idea being that design and creativity must become the focus for strengthening the economic development of the city and its metropolitan area, it must be the catalyst for innovation and a facilitator of Valencia’s internationalization. It’s going to reach all the economic and social sectors of the city.
The plan is for a public-private collaboration and strategic alliance of an open innovation model, which will be based on the interaction of public administration, private companies, academic entities and individual people. The City Council has stated that design must be, in the next three years, a facilitating interface of the relations between creativity and innovation, nurturing connections between the institutional structure of the City Council of Valencia, civil society, business, and its main cultural institutions.
Based on the activities and visitors to Valencia, the economic impact that the celebration of the World Capital of Design could have on the city in the coming years has been estimated at about 10,000 professionals visiting, which could generate a commercial impact in the city of about 8,5 million euros, which would mean multiplying the organizational budget by one and a half. However, a more advanced analysis has estimated the arrival of some 50,000 professionals, whose business impact in the city would reach an even higher figure of 29 million euros. So, the bright future of Valencia is being well- designed.
Real Estate at ‘real prices’
In both Madrid and Barcelona, the cost of buying property, or even renting, has become quite daunting recently, especially when the average salary in Spain is considered. The housing market in Spain is still quite buoyant, but neither of these two cities really have the scope to grow, due to a lack of available or suitable terrain, something that Valencia certainly doesn’t suffer from. This means that investing in Madrid or Barcelona could lead to your investment becoming sub-optimal; meaning that the price of your property would fail to increase. So, if you were hoping for a quick return on your investment, you’d be left rather disappointed. However, most property experts agree that there is little doubt that Valencia has become the new jewel in the crown of investment opportunities when it comes to real estate. And there’s Little wonder – when prices for housing or office spaces are approximately half those of Madrid or Barcelona.
There are also plenty of areas in and around the city undergoing large-scale development and expansion, which give savvy investors a multitude of opportunities. Have a look at some of these surprising areas in Where to live in Valencia. And, with better weather than Madrid, and a more economically stable climate than Barcelona, what other arguments do you need in favour of Valencia?
Rentals – Supply the Demand
Valencia also offers many opportunities to invest in property with the idea of renting it, due to the ever-increasing size of the student population. This is because, whilst a couple of years ago the focus was firmly on Madrid and Barcelona, these days investors are now sizing up the, as yet unmet, demand for student accommodation in cities such as Valencia, where not only property prices, but rents are much more affordable than in Madrid and Barcelona, making studying in one of Valencia’s highly-acclaimed universities that much more attractive. And we’re not just talking about private, individual entrepreneurs, it’s far easier for larger investors to locate and develop prime sites at reasonable prices. In the Grau/Cabañal area of Valencia, between the Universities and the beach, Princeton Investments and WP Carey opened a high-quality student residence with 350 studio apartments in 2019. So, are you ready to jump on the bandwagon before it leaves?