On the 1st of April, in London, Iberian Property and CBRE resumed the series of the IBERIAN INVESTMENT BRIEFING, a premier half-day conference dedicated to real estate investment opportunities in Spain and Portugal. Under the title "IBERIA: LEADING EUROPE FORWARD," this exclusive event brought together key industry leaders to explore the latest market insights, strategies, and emerging opportunities in the Iberian region.
In the midst of Europe’s macroeconomic uncertainty, the Iberian Peninsula is increasingly emerging as a compelling destination for real estate capital. That was the central message from Paloma Relinque and Igor Borrego, Heads of Capital Markets for CBRE in Spain and Portugal respectively, who joined forces to present a cohesive picture of the region’s investment fundamentals.
They pointed to a macroeconomic context that places Iberia ahead of many of its European peers. While much of the continent grapples with demographic decline and subdued GDP performance, Spain and Portugal are outpacing expectations. The primary driver? A steady inflow of young, economically active immigrants who are replenishing labour markets and providing the kind of demographic engine that is essential to long-term economic vitality.
Also emphasised was the growing strategic relevance of geography in today’s geopolitically complex landscape. Shifts in global production and energy systems, combined with a renewed focus on proximity to talent, are pushing corporations to reconsider their locations. Iberia, with its favourable climate, quality of life, and now its burgeoning infrastructure, is starting to benefit from this rebalancing.
Inside Iberia: the view from an International Asset Manager
When it comes to identifying and executing complex real estate investments across Europe, Colman Mccarthy, Partner in Real Estate Investments at Signal Capital, has a track record that speaks for itself. Following CBRE’s presentation on Iberian real estate investment opportunities, in an interview format Mccarthy shared insights into the fund’s strategic entry into the Spanish and Portuguese markets—regions that have formed a distinct and profitable component of Signal’s broader European portfolio.
A Strategic Entry Born of Opportunity and Experience
Signal Capital Partners, a London-based private asset management firm, was established in 2015with a clear strategy: to pursue opportunistic real estate investments across the capital stack, featuring direct equity investments and excluding senior lending. With an eye toward returns in the 15–20% IRR net range, typically over a three to four-year investment horizon, the firm presents itself as “market and sector agnostic”, is to say non constrained on those matters.
Mccarthy’s own path into the Iberian market began somewhat indirectly—through early work on non-performing loan (NPL) acquisitions during his time at Kennedy Wilson. “I was bidding on Octopus, a very large Iberian NPL portfolio,” he recalled. “We were unsuccessful, but I ended up spending a lot of time in Madrid and Lisbon and developed a strong familiarity with the local market and players.” This initial exposure laid the groundwork for what would become a more deliberate strategy once Signal Capital was established.
In its first fund, Signal executed two office transactions in central Madrid and another two office investments, along with a hotel transaction, in Portugal. Each project was underpinned by a different set of fundamentals, reflecting the distinct market dynamics in each country.
“In Madrid, we acquired offices with vacant possession, invested capital into refurbishment, re-let the buildings, and exited at a profit. That was around 2017 or 2018—when capex wasn’t as prohibitively expensive as it is now.”
Lisbon, on the other hand, offered a more straightforward value proposition. “On a per square metre and yield basis, it was just cheaper. We acquired a large office building just outside Parque das Nações. It had legacy ownership, very low rents, and was under-managed. Our business plan was clear: bring in strong local partners, institutionalise the building, and reposition it.” The result was a textbook success, with the building selling during the pandemic for over €100 million—a significant exit in Portuguese market terms.
The pattern repeated itself with an office park acquisition on Lisbon’s western corridor. “Again, we partnered with an excellent local asset manager, made public realm and amenity upgrades, and executed very well. That exit, too, was over €100 million. Not bad for a market that’s often light on liquidity.”
Iberia’s Role in the Broader Portfolio
While Iberia is not the core of Signal’s pan-European portfolio, it remains a meaningful component. With approximately €3 billion in assets under management, the region currently accounts for around 10%.
“We’ve just completed two new office projects in central Lisbon,” Mccarthy said. One of them is a landmark building on Avenida da República, previously owned by Angolan oil giant Sonangol. Acquired in 2020, the asset is now being leased up. The other, a boutique development on the city’s Riverside, has achieved top-floor rents at €35 per square metre—a notable benchmark in the Lisbon office market.
Signal’s exposure in Spain also includes hospitality. In Tenerife, the firm acquired a hotel with vacant possession, spent 18 months refurbishing it to a true five-star standard, and has now entered the ramp-up phase. “We had some legacy F&B issues, which we’ve since resolved by bringing in a new operator,” Mccarthy added.
Why Local Partnerships Are Essential
Signal’s lean London-based real estate team—just eight professionals covering all of Europe—means local execution capability is non-negotiable. “There’s absolutely no way we could run the type of projects we do without strong local partners,” Mccarthy stressed. “A huge part of my job is flying across the continent, meeting potential asset managers and operating partners, and assessing who we can work with. In Iberia, we’ve been lucky to find great collaborators who’ve made a significant impact.”
The Legal Landscape: Familiar Challenges, Local Nuances
Asked about the legal frameworks in Spain and Portugal, Mccarthy described them as relatively manageable compared to some other jurisdictions. “There’s a slightly more relaxed cultural style, which helps. We’re also active in the UK, Germany, Italy, Poland, and the Spanish islands, so we’ve developed a good feel for regional differences.”
However, not everything is straightforward. “Licensing has been tricky in some cases. What’s often surprising from an Anglo-Saxon perspective is the power that municipalities wield. That takes getting used to.”
Still, regulatory hurdles are not the biggest concern. “Liquidity is the bigger issue. Outside Lisbon, Porto, Madrid, and Barcelona, it can be hard to find a buyer. And since our model is built around three-to-four-year holds, we always have to ask: who’s going to buy this next?”
Capital Availability and Scalability Remain Key Constraints
Portugal, in particular, presents challenges when it comes to capital exits. “There are a few local champions with capital, but I joke with them—because I say this directly—that I wouldn’t want to be selling to them. They’re not going to pay me the premium I need to meet our returns.”
Another difficulty lies in scaling operations. Mccarthy cited Purpose-Built Student Accommodation (PBSA) as a promising sector in both Spain and Portugal, but also a perfect example of the scale problem. “There’s fierce competition for sites. To create a meaningful platform, you’d need 2,000 to 3,000 beds, and that could take ten years. We don’t have patient capital for that kind of slow accumulation.”
A Measured but Confident Approach
For Signal Capital, Iberia has proven fertile ground—not because of sweeping market trends, but because of carefully chosen investments, smart execution, and trusted local partnerships. “We’d like to think we’re good at what we do,” Mccarthy said. “But there’s no denying that luck played its part, especially with our exits.”
Yet luck, as they say, favours the prepared—and in Iberia, Signal Capital seems to have struck that elusive balance between preparation, opportunity, and timing.
