Chairman Joaquin Rivero also said Metrovacesa would top its full-year forecast of euro 230-million ($283.3-million) profit. "We are studying acquisitions in countries which offer fiscal advantages in the rental market. We are in the process of studying different companies in France, the Netherlands and Belgium," he told reporters at a real estate fair in Barcelona.

Although the company has mainly been looking for small acquisitions, Rivero indicated he would be prepared to spend the full euro 1 billion ($1.2 billion) on one acquisition. He expects to complete a deal by April of next year. The company has identified 20 possible firms in the three countries, both listed on the stock exchange and unlisted. "We're talking about deals which, either one alone or several could amount to more than 1 billion euros," Rivero said.

Metrovacesa has wanted to grow abroad, exclusively in the rental market. Rivero said the company had tried to buy French real estate firm SFL, but Spanish rival Colonial ended up in control earlier this year. "We're talking about companies through which we will have a platform in that country, as we tried with SFL, but it escaped us," he said.

Spanish savings bank Bancaja is already backing Rivero's plans. It emerged yesterday that the bank has doubled its stake in Metrovacesa to 6%.

A wider endorsement of the Spanish real estate sector came from UBS. A broker's note pointed out that the Spanish real estate sector has outperformed its European peers and the Madrid general index since the beginning of the year. The broker said that although share prices discount new optimism on the office market and sustained strength of the housing market, "underlying property value growth is limited."

"We forecast moderate rental value growth over the coming months, with yields remaining stable at best," it said, noting that while price inflation is expected to decelerate, it does not foresee a "crash" in the housing market.