European Outlook 2026

Key Takeaways

Economy

The Spanish economy will benefit from the gradual recovery of the Eurozone, with a projected growth close to 1% in 2026 and inflation aligned with the ECB's target. Consumption will continue to be a key driver thanks to real wage increases and the dynamism of tourism. Although risks related to foreign trade and energy costs persist, expansive European fiscal policy and improved financing conditions will favor investment. For the real estate sector, this translates into a normalization of yields and greater liquidity for prime and sustainable assets. Read more.

Office

In Spain, office demand will be concentrated in prime locations, especially in Madrid and Barcelona, where the shortage of quality supply will continue to put pressure on rents. The limited pipeline and the growing preference for flexible and technologically advanced spaces will drive the rehabilitation of obsolete buildings to ESG standards. Digitalization and AI will increase the need for collaborative and connected environments, consolidating the attractiveness of CBDs as strategic hubs for international companies. Read more.

Logistics

Spain is positioning itself as a key logistics hub between Europe, Africa, and Latin America, which reinforces its attractiveness for operators and funds. Prime rents will continue to grow, with forecasts placing Spain among the most dynamic markets in Europe. The limited supply in Barcelona and Madrid will drive developments in Valencia, Zaragoza, and other strategic corridors. High liquidity and yield compression anticipate an increase in transactions, especially in core assets and large portfolios. Read more.

Retail

The recovery of consumption and tourism will consolidate the growth of physical retail in Spain, especially in the high streets of Madrid and Barcelona and in prime shopping centers. International brands will intensify their expansion, betting on experience stores and omnichannel strategies. Rents in top locations will continue to rise, while competition for quality spaces will intensify. Investor interest will focus on retail parks and centers with repositioning potential, supported by more favorable financing conditions. Read more.

Living

The structural housing deficit in Spain will continue to drive demand, especially in rental and student housing. Residential rents will register significant increases, with forecasts of 5.3% in 2026 and 4.5% in 2027, well above other European markets. Although construction costs remain high, fiscal measures and public support will improve the viability of build-to-rent and PBSA projects. Madrid, Barcelona, and university cities will be the main investment focuses. Read more.

Hotels

Spain will continue to lead hotel investment in Europe, along with Italy and France. International tourism will reach record highs, with a full recovery of Chinese travelers expected by the end of 2026. The luxury and economy segments will concentrate the highest investor demand, with yields compressing due to excess capital. Although fiscal and labor pressures are anticipated, adaptation in sustainability and technology will be key to maintaining competitiveness and attracting investment. Read more.

Data Centres

Madrid is consolidating as a strategic node in southern Europe, thanks to its connectivity with Africa and Latin America and its low latency. Demand driven by AI and cloud will grow from a low base, although power limitations require infrastructure investments. Ongoing projects and government support anticipate accelerated development, with opportunities for campuses in peripheral areas with access to renewable energy. This sector is emerging as one of the most attractive for international capital in Spain. Read more.