For Venezuelan exiles with money, Madrid has become a home away from home.
Venezuelans are increasingly turning to the Spanish capital as a place to invest as their home country falls further into economic chaos and the political mood turns more sour in U.S. havens such as Miami. The number of Venezuelans arriving in Spain rose more than 50 percent in 2015, according to the Spanish statistics office, the biggest increase after immigrants from the Ukraine.
With its shared language, stable politics and a property market that’s still recovering from a six-year crash, Spain holds many attractions for wealthy Venezuelans seeking a shield their assets from economic disorder in their home country. The number of properties sold to Venezuelan nationals jumped 17 percent in 2016 according to Spain’s property register.
“The worse things get in Venezuela, the more they buy in Madrid,” said Alvaro Gonzalez de la Hoz, director general at the real estate unit of Petrus Grupo Inmobiliario, which specializes in selling and renting high-end properties in the upscale Madrid neighborhood of Salamanca. “They feel safe here, they like the quality of life, they speak the language — and they’re taking money out of Venezuela.”
Hit by sky-rocketing inflation and a surge in crime, Venezuela has descended into an economic pit.
While Venezuela’s central bank stopped publishing inflation data in December 2015, the International Monetary Fund argues the nation has entered a spiral of hyperinflation with price increases seen rising above 1,600 percent this year. Similarly, figures for domestic product haven’t been updated in more than a year, although the Washington-based institution estimates the Venezuelan economy contracted 10 percent last year, making it the world’s worst performer.
A political crisis which has seen President Nicolas Maduro holding on to power in defiance of mounting opposition is contributing to the economic collapse. Against that backdrop, food and energy shortages are common.
Meanwhile, Caracas-based Grupo Sambil has spent 60 million euros ($64.8 million) upgrading a shopping mall in Madrid they acquired in 2012 and plans further investments in Spain including in real estate, said Director General Alfredo Cohen in an interview. Venezuela’s late President Hugo Chavez expropriated a shopping mall in Caracas owned by the family in 2008, announcing the move on his weekly television show.
“The country is going through a political and economic crisis, so diversifying
our product, which has been very successful back home — in fact we are still
headquartered in Venezuela — is a good idea,” said Cohen. “We don’t just do shopping centers, we’re also a construction company and we have the cash to invest if we spot a good opportunity here in Madrid.”
For luxury real estate agents in Madrid, the crisis in Venezuela has yielded a business opportunity.
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