Daniel Lacalle: “We should not demonize tourism, rather we should understand that it is the pillar and the launch pad for many more companies”
ibeconomia.com - martes, 26 de marzo 2019 | 10:11 Hrs.
With a long career focused on the main areas of large companies as well as portfolio management, and having written several books, the economist Daniel Lacalle is now a familiar face in the media, whom we requested his analysis on many different subjects. We had the chance to go over with him some of the issues of special interest for potential investors in Mallorca.
What growth perspectives do you see for the real estate market, especially internationally, after the crisis?
The real estate market underwent a much needed and very healthy correction after a bubble that was unparalleled by any global economy, as it reached the point of comprising 12% of the GDP. Therefore, growth must now come from added value, because there are still hundreds of thousands of homes unsold in Spain.
We must understand that the real estate sector is not going to have the elements that led it astray from the reality of supply and demand. But this does not mean that there is not enormous potential in a sector that goes beyond the predator model of constructor-developer seeking volume for volume’s sake, and focuses on added value, quality and meeting the patent needs of its clients. Any company that focuses on business as it always was before the debt craze will find opportunities to succeed.
What do you think of the reactivation of this market through Socimis (REIT)?
Socimis were an essential element in the reactivation of a market where the bursting of the bubble left very clear opportunities, almost bargains, on high quality assets. However, these Socimis have proliferated and not all of them have a clear growth model. I think that those that are focused on very specific niche sectors in a market that they know very well will have opportunities, even in the long term. But we must be very selective and choose good managers with clear projects and a definite history of attractive operations.
What do you think are the strong and weak points of the Balearic Islands as an investment destination, as opposed to its Mediterranean competitors?
The weakest is the enormous bureaucracy and slowness of the Administration, and a tax system and regulations mistakenly aimed at hindering investment and ignoring competitor markets.
The strongest point is a very important comprehensive tourism and culture offering. A huge potential to transform a tourism industry that still has much room for improvement in quality and added value. It also has huge strengths in a very diverse services sector, and excellent professional lawyers, consultants and financial advisors. Lastly an export spirit and a huge potential to connect with countries with the highest growth rate.
In the Balearic Islands the issue of diversification of the economy is often discussed. What do you think are the keys to achieving this?
Although it may sound strange, the tourism sector is precisely the one that will bring about a change in the growth pattern. In the Balearic Islands it has been proven that political control and subsidies have not helped to bring about that change in the last 25 years. We should not demonize tourism, rather we should understand that it is the pillar and the launch pad for many more companies, from different sectors, to come into the Balearics, because those entrepreneurs see good infrastructures, quality services, ease of connection with the world and, if there is a good environment, they will see all the advantages created by tourism to install their business in the Balearics.
Therefore, we should see tourism as the reference for our economy, and let’s facilitate the creation and settlement of new companies with higher added value from an attractive and welcoming tax and administration standpoint, and not from what I call the “bureaucratic tsunami”.