MARKET CONTEXT
- The Spanish residential market shows solid recovery in 2025, with controlled inflation (2.2%) and a growing population (49.15M).
- The decline in Euribor has boosted transactions, which rose 20% year-on-year through May.
- Institutional investment remains prominent, particularly in BTR and Flex Living.
- Rental regulation is increasing, with stressed zones and the introduction of the IRAV index for rent updates.
- Rental demand continues to exceed supply, reinforcing upward pressure on rents.
OCCUPIERS AND OPERATOR TRENDS
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PRS / BTR / Flex Living:
- Strong rental demand due to limited access to homeownership.
- Flex Living leads growth (+200% in deliveries in 2024).
- BTR maintains a steady pace with 8,000 units delivered.
- PRS remains stable with a stock of ~20,000 units.
- High institutional activity, especially in BTR and Flex Living.
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PBSA:
- 7% provision rate of beds in relation to total student population in Spain.
- Increase in international students due to educational quality and lifestyle.
- Fragmented market; top operators represent <45% of total.
- New developments led by institutional capital in key and secondary cities.
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Nursing Homes:
- Aging population and high life expectancy drive demand.
- Deficit of ~100,000 beds compared to recommended standards.
- Fragmented market; top 10 operators control only 25%.
- Focus on sustainable developments in new locations.
- Operational costs, especially wages, placing pressure operators.
TRANSACTIONS AND YIELDS
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PRS / BTR / Flex Living:
- Moderate but stable transactional activity in H1 2025, with €617M invested (+52% YoY).
- Notable deals: GMP acquires Bext Space (285 units, Madrid); two BTR sales by Neinor Homes to Round Hill (123 units, €25M) and to 1810 Capital Investments (128 units, €25M) across various Spanish locations.
- Prime yields: 3.75% in central Madrid and 3.95% in Barcelona; decentralized areas range between 4.15% and 4.25%.
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PBSA:
- Strong market reactivation with large-scale transactions.
- Highlight: CPPIB acquires Livensa Living portfolio (9,000 beds) from Brookfield for €1.2B.
- Prime yield compressed to 4.40% in Q2 2025.
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NH (Residencias de Tercera Edad):
- 2025 began with limited investment activity, including one portfolio transaction and three individual deals, two of which involved Sanitas as the operator.
- The continued expansion of operators such as Sanitas in key Madrid locations could generate new opportunities for both private and institutional investment.
- Theoretical prime yield stands at approximately 5.5%, although transactions are being closed above 6%.