THE RISE OF REAL ESTATE INVESTMENT IN SPAIN

Real estate investment in Spain has seen remarkable growth in the second quarter of 2024, registering a 7.3% increase compared to the previous quarter. This momentum has been mainly led by the hotel sector, which has reached an investment volume of 1,034 million euros, the highest in the last twelve months. Despite a decrease of 10.7% compared to the same period of the previous year, market stability and growing investor interest augur a promising future for the sector.

Solid economic outlook

Borja Ortega, CEO of BNP Paribas Real Estate Spain, highlights that despite the slight contraction in the annual investment volume, the Spanish economy remains robust and resilient. The International Monetary Fund forecasts GDP growth of 2.4% in 2024 and 2.1% in 2025. This favourable economic context has been boosted by interest rate adjustments that have stabilised returns, creating a favourable environment for increased operations and investments towards the end of the year.

The attractiveness of the hotel sector

The hotel sector remains a crucial pillar for real estate investment in Spain. In the first half of 2024, total investment reached nearly €1.4 billion, although this represents a 26% decrease compared to the same period of the previous year. This decrease is largely due to the significant acquisitions made in 2023 by the Abu Dhabi sovereign wealth fund AIDA, which amounted to approximately €1 billion. Among the notable transactions of the quarter is the purchase of the Six Senses hotel in Ibiza by the Statuto Group, valued at around €200 million.

Diversification of the real estate market

In addition to the hotel sector, the Spanish real estate market has seen significant dynamism in other segments. The retail sector recorded transactions totalling 463.3 million euros between April and June, concentrating 53% of the transactions in Madrid and reaching a total investment of 1,295 million euros in the first half of the year, which represents an increase of 262% compared to the same period last year.

The logistics sector, for its part, accumulated an investment of 348 million euros in the quarter, with expectations of reaching 1,500 million euros by the end of the year. Institutional funds and private equity have been key players, dominating the investment with shares of 46% and 19% respectively, while real estate companies and socimis contributed 18% of the quarterly volume.