Marketbeat Spain Living

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

• 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.

• 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.

• 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

• 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%.

• 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.

• 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%.