CG Capital Europe: Spanish Living Sector in 2022
FY22 was an excellent year for the living sector in terms of investment. Of the total amount invested in the Spanish real estate sector, 19% was allocated to living (c.€3.1 billion, excluding student housing). Moreover, it represents a growth of c.3% compared to FY21 (c.€2.9 billion).
Prime yields experienced several upward adjustments over the year given current situation, in fact, during Q4 22 yields increased 25 bps, reaching 3.75% and 4.25% in Madrid and Barcelona, respectively.
Total housing purchase and sale transactions added up to 542,000 during the first three quarters of 2022, mainly driven by foreign buyers. In addition, housing prices-maintained record increase rates (7.6% as of Q3 22).
BTR segment also observed interesting strong fundamentals: Investment volume reached c.€1.8 billion, becoming one of preferred asset classes, as it is considered a safe investment.
The construction of new product and the increasing effort needed by Spanish households to acquire a home has caused the rental tenure regime to stand at 24.2%, and is expected to reach c.30% in 2026-2027.
Regarding BTR prime yields, despite the upward adjustments in H2 2022, these have remained as one of the most compressed yields (3.75%).