Transforming Challenges into Opportunities
The Spanish real estate market closed 2024 with a notable performance in a challenging global environment. Estimated investment figures foresee to reach nearly €10 billion, surpassing initial forecasts of €8 billion. Despite being an adjustment from the historic levels of 2022, the sector demonstrated resilience and adaptability, driven by solid fundamentals and international capital.
Key Sectors:
- Retail and Logistics: Led the market dynamism. Prime shopping centers and retail parks balanced profitability and stability, boosted by tourism and consumption recovery. Logistics continued to be a strategic pillar, driven by e-commerce and the food sector.
- Office Market: Sustainable and well-located assets in major cities like Madrid and Barcelona performed solidly, attracting both sustainability-focused occupants and international investors.
- Residential Sector: Build-to-Rent and senior housing continued to attract investment due to stable returns and growing urban housing demand. Alternative segments like data centers, life sciences, and student housing also solidified their positions.
Outlook for 2025:
- Investment Growth: Projected investment volume between €11-12 billion, a 10-20% increase from the previous year, driven by a favorable financial environment and lower interest rates.
- Retail and Logistics: Expected to remain attractive, with prime shopping centers evolving towards hybrid models and logistics continuing its growth due to high demand from strategic sectors.
- Office Market: Will face a dual challenge of maintaining competitiveness through ESG compliance for obsolete and peripheral buildings. The obsolescence of certain assets and their potential conversion to residential use offer solutions to housing pressure. Initiatives to convert non-prime offices or retail spaces to Build-to-Rent or student housing can address housing deficits and add value to otherwise lagging assets.
- Alternative: Data centers and life sciences labs will remain strategic bets, while Build-to-Rent and senior housing will continue to attract investment.
The Spanish real estate market enters 2025 with optimistic prospects, driven by sustainability, digitalization, and adaptability as transformation engines.
