Despite the slowdown in investment across most real estate asset classes in Spain, the Living sector hasn’t stopped growing. Throughout the first quarter of 2023, it registered an investment volume of more than €800 million, which represents an increase of c. 120% compared to the last period of 2022. In the first quarter, the sector received c.40% of the total real estate investment in Spain.

Investment in Multifamily stands out for accounting to c. 90% of the total investment in the sector with around €720 million, with over half of transactions taking place in secondary locations in the country. This represents an increase of more than 100% over the previous year. Multifamily yields have increased partly due to the rise in central bank interest rates and stand at 3.75% in Madrid and 4% in Barcelona.

Another asset type that has grown to a certain extent is Student Accommodation, which registered a total investment of €30 million in Q1 2023. However, there is a significant decrease compared to last year, caused by the shortage of quality land as investors now preferring to invest in new construction (BTR). As in the case of Multifamily, yields in Student Accommodation have also increased to c. 4.75% in Spain compared to the previous year.

Finally, Healthcare and Senior Living are growing strongly due to demographic changes as a result of the increase in life expectancy, which translates into long-term demand. In the last quarter, c. €35 million were invested in this asset type. Yields remained stable compared to the last quarter at 5.00%.

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