H1 2024 Living investment reached c. €1,090 million (-20% vs. H1 2023), spearheaded by alternative sectors, remaining as one of the most sought-after asset classes in Spain. Student residences, changes of use (from office to BTR), and flex living developments have comprised the bulk of the investment and are forecasted to further attract investor’s interest in the future.

The scarcity of residential floor, the persistence of demographic and socio-cultural factors, combined with the hardening in financing conditions, have further increased the demand for rental housing, which is estimated to represent c. 27% of household schemes by 2028 (vs. actual c. 25%).

The rise in the number of transactions to c. 160,000 in Q1 2024 (c. +2% vs. Q1 2023), was spurred predominantly by a vigorous domestic labour market and international buyers which continue to seek prime Living assets in main urban hubs.

Prime residential yields in H1 2024 stood at 3.8% in Madrid and 4.3% in Barcelona. Prime yields for Flex Living and Student Housing stood at 5.1% (+c.10 bps vs. H1 2023) and 4.30% (maintained vs. H1 2023), respectively.

Driven by short supply, rents in main urban hubs continue to rise: Valencia’s rents increased by 19.9%, Madrid’s by 18.7% and Barcelona’s by 13.8%.

Selected transactions: In the first quarter, Bankinter acquired the Méndez Álvaro 61 building in Madrid from Colonial for €130 million (374 units, €347,594/unit). In the same quarter, Renta Corporación purchased a portfolio of 4 logistic assets in Madrid from Tempore for €63.5 million (556 units, €114,209/unit). Additionally, in Q1, Home by Gestilar acquired a portfolio of 66 living units in the Barrio de Salamanca from an undisclosed seller for €50 million (66 units, €757,576/unit).

In the second quarter, Impar Capital purchased a BTR asset in Madrid from Colonial for €56 million, while Factum acquired a BTS asset in the Barrio de Salamanca from Colonial for €18 million (12 units, €1,500,000/unit).

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