Sol Sports Invest (SSI) is an independent sports advisory & investment firm located in Alicante & London and below are our 8 predictions for the sports and real estate industry in Spain for 2023.
Sports-related real estate
1) Golf & sports resorts will continue to seek and partner with public authorities and private investors to improve and expand facilities (circa € 10 million in the Alicante region invested in building football pitches to FIFA standards and player facilities to handle the growing demand for professional & amateur sports teams camps and tours. Approximately €2 million has been invested at La Manga Sports Resort in Murcia to redevelop their tennis centre.
2) Increased investment into golf & sports resorts by amateur and professional sports teams to build private training facilities and benefit from the resort’s existing facilities (Clubhouse, changing facilities, golf course and hotel spa facilities) InterCity FC, a Third division Spanish football Club invested approximately 200K euros in 2022 to initiate construction of a private training pitch at Bonalba Golf Resort, close to their home ground in San Juan. Public and private land is scarce and costly in the Alicante region to build sports facilities and therefore existing golf course resorts offer a viable alternative.
3) An increase in demand from national and international companies for commercial premises to lease and purchase for relocation and expansion purposes. Sports resorts can offer a healthy quality of living, on-site sports and conference facilities for employees and clients as well as rental/purchase transactions being up to 5x less than Sweden, Norway UK and other expensive European countries.
4) New build developments on golf courses and resorts aimed at the residential market to grow at a steady rate. The new build market on Spanish golf resorts is predominantly aimed at the international buyer and predictions for a global recession will no doubt have a knock-on effect on sales. However, with a healthy appetite for retirees to move permanently to Spain, local government incentives for digital nomads/remote workers to relocate and investors buying units for occasional use and to let, we predict that these factors will offset any global recessionary factors.
5) The second-hand market in many areas will get hit the hardest. In the last 2 years, we have seen second-hand apartments and villas increase by a staggering 40% in certain areas of the Alicante Golf area, San Juan, where we are located. ( See To buy or not to buy in Spain … – Sol Sports Invest for a detailed analysis of the property market in Alicante Golf ) In certain areas, we predict on average the second-hand market to fall by between 15-30%.
6) Fractional ownership is slowly taking off here in certain areas of Spain. This is not a timeshare option but an opportunity to own a share of a property via company shares. With rising energy costs, interest rate hikes and a recession looming, a fractional ownership will make sense to people that only plan to visit Spain a few weeks a year and want to holiday or let out their property. Click here to view a detailed look at fractional ownership for a golf apartment in Murcia. https://solsportsproperties.com/category/fractional-ownership-of-a-golf-property/
7) Sports-related assets including gym franchises, tennis centres and golf courses to merge and be sold to private equity firms and alternative investment companies. Their struggle to service debt and an inevitable recession will require considerable investment to survive.
Sports Team funding
8) Sol Sports Invest recently partnered with Toronto and Madrid-based company, FanClub Sports Capital which provides out-of-the-box tools to empower teams & communities to raise and invest capital in sports in a way that is effortless, social, and accessible. Community FanClub is a community of the world’s most prestigious private investors & sports fans seeking sports as the next frontier of alternative asset investing.
2022 saw billions of euros pumped into professional sports teams across Europe and we predict this trend to continue into 2023. Spanish La Liga has received € 1,934 million via CVC, a leading global alternative investment manager focused on private equity, secondaries and credit with a global network of 25 local offices and €137 billion of assets under management.
Here in Spain, the race to both the La Liga (1st Division) and Liga Santander (2nd Division) promises financial rewards that are attracting private investors from all corners of the globe to invest in Spanish Clubs.
Why invest in a second or third-tier football Club?
Investment into a Spanish Club can bring tremendous financial rewards if a club is bought at the right price and managed well concerning restructuring debt, staff/player recruitment and most important, respecting the fan´s views and culture within a country. The below outlines a few reasons why many private equity firms are racing to raise funds for Spanish Football Clubs:-
i) Fanbase – to increase revenue via merchandise, sponsorship and via other partners.
ii) Real estate – sports grounds and surrounding plots can be ideal prime real estate to build academy and sporting centres, shopping and other entertainment centres to increase revenue.
iii) Media/TV rights – with an increasingly global reach, tv rights can be very lucrative
iv) Player pathways and trading players
v) Producing exciting and engaging content at both academy and first-team levels to promote on social media platforms and subsequently monetise
vi) Fans have been proven to be very loyal despite results and investing in a Club is therefore seen as an ideal alternative investment asset
vii) The pandemic has hit many Clubs financially and many lower league Clubs are struggling to balance books and can therefore be bought at a fair price in comparison with other European and USA Clubs and franchises
2023 promises to be an exciting time to invest in sports and although tough times are ahead, there are many opportunities within the Spanish sporting arena for the discerning investor seeking to partner with or purchase a sports-related asset, whether golf real estate or a professional football Club.
For further information on our portfolio of sports-related investments in Spain, please do not hesitate to contact us for an informal chat.
Happy New Year!!!