BTR sector in Spain is expected to evolve dynamically over the next years. Over 90,000 rental residential units are expected to be developed until 2028, at an average rate of c.9,000 dwellings per year during 2021-2023, increasing to c.13,000 units per year from 2024.

Mortgage credit restrictions, increased preference for rental homes vs. owned homes and lower wage growth compared to house prices are driving the demand for rental homes. Currently in Spain, only c.24% of the population lives in rental homes, far from the EU average (c.31%) and from other peer countries (Germany c.49%; France c.36%; UK c.35%; Netherlands c.31%), and it is expected that the percentage in Spain will increase over coming years.

The development of BTR projects has been fuelled both by the public and private sector: Spanish government’s initiative to build 20,000 affordable rental homes and the entry of top tier private investors into the market such as Ares, Azora and Axa. So far in 2021, the main transactions have been the sale of 1,100 homes by Gestilar to DWS for €240 million and the purchase of a residential building by Patrizia in 22@ for €34 million.

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