Along the past months, production figures, number of transactions and house prices have experienced a very solid growth. This, alongside high levels of liquidity, low interest rates and a solid investor appetite have set the ground for the strengthening of a real estate sector that is fast approaching pre-pandemic levels.

The living sector outperformed in 2021 with 22% of total investment in Spain, c.€2,959 million (+13% vs. FY2020). For 2022, transaction volume is also expected to rise, especially with regards to Build-to-Rent (BTR) projects.

The creation of new vehicles between foreign institutional capital funds and local developers will continue throughout 2022 and a higher rotation in the form of divestments are expected to occur as 2022-2023 come to an end and their investments horizons are due.

The residential or multifamily investment segment, comprised of a finished and ready-to-rent product (PRS) alongside BTR continues to account for over 75% of total investment within the Living sector, of which 55% is BTR. The number of homes is expected to grow by 39% in the period 2002-2035.

The number of rental households stood at 24.8% of total available and we estimate that it will grow to 27.3% in 2025 due to sociocultural changes and the difficulty involved in finding funding to purchase new houses.

Yields in the residential sector remains attractive, with prime yields within the 3.00-3.50% range and standing close with the levels of top-tier European cities like Copenhagen and London.

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