Any excuse for a reinvention

Barcelona has gained a bit of a reputation for reinvention. The 1992 Olympic Games gave the city a facelift that would mesmerise Michael Jackson. Central neighbourhoods such as the Raval and Born went from derelict to desirable, and Barcelona has overtaken Paris as the number one short break destination for the British.

Now, the city hailed by Newsweek as the "capital of the Mediterranean" is at it again with this summer's 15-week extravaganza, the Universal Forum of Cultures. As the first event of its kind, people are at pains to sum it up succinctly. But the buzzwords are cultural diversity, sustainable development and conditions of peace and it is hoped the idea will catch on and be hosted by other countries in future years.

A vast arts programme runs from 9 May to 26 September, with more than 450 concerts featuring everyone from Bob Dylan to Rostropovich, as well as dance, theatre and exhibitions, set against a weighty seminar lineup featuring Bill Clinton and Mikhail Gorbachev.

What's it all for? Well, there's the humanitarian ambition. "It's a place for dialogue and conflict resolution, to try to solve the world's problems in one place, beyond the usual political and decision-making arenas," Frederic Porta, the Forum's spokesman, says. And then there's the commercial incentive - Barcelona gets another injection of urban development, for which it is considered a model city.

The focus this time is the depressed River Besos area, renamed Diagonal Mar and now sporting a Docklands-style infrastructure of luxury sea-view apartments surrounded by gardens, lakes, gyms, hotels and shopping centres. "Barcelona has a tradition of making leaps ahead by holding big celebratory events," Porta says. "They are excuses to change the city. We need these excuses because we're not an administrative capital like London or Madrid. We need to reinvent ourselves to progress."

François Carrière Pastor, the managing director of John Taylor estate agents, agrees that the Forum is an excuse to develop a new area of the city by the sea. "It has been designed for the property market. Everyone who moves here wants to live there - Diagonal Mar is the only place in Barcelona where you can get a modern building with a parking space."

Given Barcelona's rocketing housing market, which has risen three times faster than salaries in the last three years, the Forum couldn't make property any more desirable. "It won't affect the property market again as things are already moving so fast," says Pastor. "We're getting a lot of calls from British people wanting to buy here and by the time they've taken a fortnight to make a decision, the property's already been sold. You have to be here to get what you want. This has become one of the best cities in Europe to live and it's hard to find bargains now, but there are still opportunities in the Born and Raval."

Big figures are being bandied about; the €2.19bn Forum, is expected to generate 50,000 jobs and provide Barcelona with a business centre and southern Europe's biggest convention centre. But Alex Martin of Martin Howard Associates, business and financial consultants to expats, says the best property deals in the redeveloped area have already been sealed. "You're three years too late to invest in Barcelona because of the Forum. All new-build property was snapped up by the Spanish when the plans were first revealed and buyers made a 50 per cent profit within two years. But Barcelona is never going to lose its appeal and it still offers attractive investment. You'll get huge returns - 10 per cent capital growth per year and 2 per cent yield." Martin recommends the Besos area "for the intrepid investor". Known as Barcelona's sewer, it's cheap just now, "but moving fast ... The Spanish look after their municipal housing so it's clean, without graffiti."

For the less speculative, the beachside area of Barceloneta and the former industrial area of Poble Nou are sure bets, Martin says. "Both are surrounded by rich, developed areas. In Barceloneta, you'll get a 30 to 40 per cent rise in the next three years and Poble Nou has great potential for loft developments."

And if you, like four million others, are drawn to Barcelona's golden sands and Gothic streets for a short break this summer, apart from the extra 8,000 hotel rooms that have been built to accommodate the Forum influx, there are plenty of apartments available for short lets. "The concept of letting out your flat for short stays didn't exist here until two years ago but now there are lots of people doing it," says Martin. "Buy-to-let has burnt out in England but it's still good business in Barcelona and the government has introduced tax incentives to reduce the number of empty flats."

If the city centre gets too crowded, the seaside resort of Sitges, 40km south of Barcelona, is a prime spot for holiday lets. Or head north to the quiet coves of Llafranc or attractive slightly inland towns of Palafrugell and Begur on the Costa Brava.

BCN Internet: 00 34 93 237 1955; www.bcninternet.com

Into Barcelona: 00 34 934 587 883; www.intobarcelona.com

Barcelona Rent: 00 34 626 706 459; www.barcelonarent.com

John Taylor: 00 34 93 241 3082; www.johntaylorspain.com

Rita Fryer, The Property Finders: 00 34 972 624 557; www.thepropertyfinders.com