MARKET CONTEXT
- Spain’s growing population (49.15M) and lack of housing development (c.100K units/annum) is creating tension.
- A decline in Euribor has boosted transactions, which rose 20% year-on-year, to mid-2025.
- Active institutional investment, particularly in Affordable Housing and Flexliving.
- Rental regulation is increasing, with stressed zones and the introduction of the IRAV index for rent updates on contracts signed after May 2023.
- Rental demand continues to exceed supply, reinforcing upward pressure on rents.
OCCUPIERS AND OPERATOR TRENDS
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PRS / BTR / Flex Living:
- Strong rental demand persists due to limited access to homeownership.
- Flexliving leads growth (7,100 units delivered in 2025).
- The BTR market has reached an inflection point, with just over 6,300 units delivered in 2025, down from approximately 7,800 units in 2024.
- PRS remains stable with a stock of ~27,000 units.
PBSA (Purpose-Built Student Accommodation):
- 7% provision rate of beds in relation to total student population in Spain.
- Increase in international students due to educational quality and lifestyle.
- Fragmented market; top operators represent <45% of total.
- New developments led by institutional capital in key and secondary cities.
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NURSING HOMES (Senior Living):
- Ageing population and high life expectancy drive demand.
- Deficit of ~100,000 beds compared to recommended standards.
- Fragmented market; top 10 operators control only 25%.
- Focus on sustainable developments in new locations.
- Operational costs, especially wages, placing pressure on operators that must comply with increasingly onerous regulation.
TRANSACTIONS AND YIELDS
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PRS / BTR / Flex Living:
- Transactional activity remained moderate but stable throughout 2025, with total BTR/PRS/Flex Living investment reaching €2,200M, (+28% YoY).
- Notable deals: GMP acquires Bext Space (285 units in Vallecas and 583 in Valdebebas, Madrid); Hines acquiring the BTR Stay asset in Cuatro Vientos, Madrid (531 units, €155M) and Meridia acquiring Sky Park Valdebebas (395 units, €160M).
- Prime yields: 3.75% in central Madrid and 3.95% in Barcelona; decentralized areas range between 4.15% and 4.25%.
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PBSA (Student Housing):
- Strong market reactivation with large-scale transactions.
- Highlight: CPPIB acquires Livensa Living portfolio (9,000 beds) from Brookfield for €1.2B (value allocation 900M Spain, 300M Portugal).
- Prime yield currently 4.40%, expected to compress towards 4.25%.
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NURSING HOMES (Senior Living):
- 2025 began with limited investment activity, including one portfolio transaction and three individual deals, two of which involved Sanitas as the operator.
- The continued expansion of operators such as Sanitas in key Madrid locations could generate new opportunities for both private and institutional investment.
- Prime yields stand at approximately 5.5%, although some purchasers are securing better returns when acting quickly with own funds.
