Real Estate Investment in Spain to Grow Further in 2025
Real estate investment in Spain is set to expand in 2025, building on the 20% growth seen in 2024. CBRE’s Real Estate Market Outlook 2025 forecasts a 15% rise in investment volume, reaching €16 billion, up from €14 billion in 2024.
Joan Pina, Director of Data Science at CBRE Spain, noted:
“With inflation nearing 2% and interest rates projected to stabilize at the same level, Spain stands out as the top advanced economy according to The Economist. Strong domestic and international demand, driven by tourism, along with low household and corporate debt, will continue to boost confidence, consumption, and investment.”
Key Opportunities and Challenges
Paloma Relinque, Head of Capital Markets at CBRE Spain, highlighted lower financing costs as a driver for investment and prime yield compression. However, challenges include limited supply, particularly in the “living” sector, and the need for capital to modernize assets.
Miriam Goicoechea, Director of Research Iberia at CBRE, added:
“2024’s 20% surge in investment exceeded expectations. For 2025, we anticipate 15% growth, led by the living sector, followed by hotels, retail, offices, and logistics.”
Sector Highlights for 2025
Living
Accounting for 30-35% of total investment, this sector remains the leader. With nearly 700,000 property transactions recorded in 2024, a slight dip to 678,000 is expected in 2025, alongside a 5.3% increase in housing prices. However, a persistent lack of supply will keep demand high and the market competitive.
Hotels
Tourism continues to drive growth, with international arrivals set to rise further in 2025, supported by a stronger dollar against the euro. Luxury and affordable hotel investments are particularly attractive, with 80% of activity concentrated in Madrid, Barcelona, and the Balearic Islands.
Retail
After a 121% growth in 2024, retail investment remains strong. Limited availability in prime areas is expected to push rents higher, while retail spaces that enhance the shopping experience are in demand.
Offices
Demand for premium, well-located offices continues, with 550,000 m² of leasing activity projected in Madrid and a 20% increase in Barcelona. The return of major companies to physical offices supports this trend.
Industrial and Logistics
The sector faces high demand and tight supply, keeping prime rents on the rise. A focus on repurposing assets, such as offices transformed into residential or hotel spaces, is expected in central and luxury locations.
Emerging Trends in Real Estate
CBRE identifies five key trends shaping the market in 2025:
- Repurposing assets for new uses.
- Adopting sustainable and wellness-focused building standards.
- Investing in operational assets like hospitals, senior living, and education facilities.
- Expanding cloud infrastructure and data center capacity.
- Advancing agribusiness and tech-driven projects.
While 2025 presents a more stable environment with controlled inflation and interest rates, external uncertainties, such as U.S. financial policies, remain a factor.
Spain’s robust fundamentals and steady investor interest ensure its position as a prime European destination for real estate investment.
