Various indicators show that “it is a good time to invest in the real estate sector in Spain.” This was recently highlighted by Eloy Bohúa, CEO of Planner Exhibitions, just before the start of SIMA, Spain’s largest real estate event, in an interview with Urbanitae.
As noted by the head of the Salon, despite geopolitical and economic uncertainty, real estate continues to be seen as a safe haven investment, and news from Europe suggests imminent interest rate cuts.
In this context, Spain demonstrates its great potential as a real estate investment destination, ranking in the top 10 most attractive European countries for investors in 2024. According to the latest European Investor Intentions Survey 2024 by CBRE, which measures investor appetite in major European markets, Spain ranks fourth, only behind the United Kingdom, Germany, and Poland. Additionally, it is the only nation with two cities in this ranking, highlighting the positive outlook for the real estate sector. Madrid, in third place, and Barcelona, in seventh, are the two national hotspots for investment focus.
Investment performance in the first quarter
In its first-quarter review, CBRE estimates that the volume of real estate investment in Spain reached 2.1 billion euros. This figure is below the nearly 2.9 billion euros of the same period the previous year. However, investment data recorded in the second and third quarters of 2023 were more restrained, with volumes similar to those observed in this year’s first quarter.
Despite the noted decline, the consultancy predicts greater dynamism in economic growth, especially in the second half of the year, once the ECB confirms the start of interest rate cuts this summer. CBRE forecasts a moderate increase of up to 10% in 2024, reaching 12.5 billion euros, according to its latest Real Estate Market Outlook 2024 report.
The consultancy’s data also reveal that national capital accumulated nearly half of the investment in the first quarter (49%). This is followed by South African capital, which was behind significant transactions at 14%, and UK capital at 13%.
Regarding investor profiles, family offices and private investors remain the most active, accounting for 19% of total investment. They are also the least dependent on financing.
By region, Madrid and Barcelona concentrate 49% of total investment, followed by the Valencian Community and the Canary Islands, each with 10%.
Retail, leader in investment attraction
Investment in retail in Spain has started strong in the first months of 2024, with a total investment volume close to 760 million euros (a 275% increase from the same period last year). According to CBRE, this segment is on the rise and leads in investment volume, accounting for 36% of the total transacted nationally. These figures are notable, considering that this first-quarter balance triples the investment volume of the same period last year.
It is also worth noting the interest generated in this segment by foreign investors, who represented 90% of transactions. Additionally, investment in shopping centers accounted for 81% of retail investment, ahead of food (16%) and high street (3%).
The hotel sector ranks second, with 27% of the total investment in the first months of the year, followed by living (residential for rent, student housing, flex living, and senior living) with 400 million euros invested, representing 18% of the total; industrial (8% and 160 million euros) and offices (7% and 140 million euros).
