The first day of the Spain Real Estate Summit, organised by Iberian Property, in collaboration with JLL and CBRE, brought together international leaders from the real estate sector in Madrid to analyse the current investment, financing and development scenario for new residential models. The institutional opening was given by Rocío Albert, Minister of Economy, Finance and Employment of the Community of Madrid, in a private lunch that gathered the Editorial Council of Iberian Property, Sponsors and Guests. Among the key figures present in this meeting was José Manuel Durão Barroso, former President of the European Commission.
With the official kick-off of the agenda, in an environment marked by macroeconomic uncertainty, geopolitical reconfiguration and the resurgence of core capital in Europe, the challenges and opportunities of the market in segments such as Build to Rent, alternative financing and flex living were addressed. From the financial analysis of Blackstone and CBRE, to reflections on European resilience and the role of China, the presentations offered a strategic vision of the present and future of real estate.
A financial vision of the real estate market
During the first day of the Spain Real Estate Summit, Luigi Caruso, senior managing director of real estate and chief operating officer for Europe at Blackstone, shared his vision for the sector in 2025 with Adolfo Ramírez-Escudero, Chairman of CBRE Iberia & LATAM.
Caruso began by highlighting the volatility of the market, which, while creating opportunities, also introduces uncertainty into the capital markets. ‘The increase in the cost of financing has gone from expensive to very expensive in recent months, although we are starting to see some signs of improvement,’ he said. Still, Blackstone is optimistic about the opportunities on the Iberian Peninsula, where it considers itself a net-investor: in the first quarter of 2025 alone, Blackstone has acquired €1.5 billion worth of assets, while divestments have been fewer.
The firm maintains a thematic investment strategy with a global vision, focusing on sectors with rental growth potential. ‘Our focus on logistics, first in the United States and then in Europe, responded to the rise of e-commerce versus physical commerce,’ he explained. On the office side, he acknowledged a significant transformation: while in the US the change has been more profound, in Europe the assets are smaller and better positioned from an ESG point of view, in line with current demand.
Regarding data centres, Caruso pointed out that they require intensive development investment, which differentiates them from other segments such as office or logistics. While Blackstone is not, by nature, a developer, he identifies growth opportunities in this sector. In Europe, he noted a consolidation of the data centre investment map, driven by factors such as energy costs and the competitiveness of certain countries.
On the residential side, he highlighted the potential of the rental market: the scarcity of supply and investment in CAPEX allow for the creation of products that are practically non-existent at present. ‘Demand is very strong and there is room to improve quality and ESG standards, which justifies higher rents,’ he said. In his view, if more affordable supply is not generated, lack of affordability will become a problem.
He also pointed to opportunities in private lending and claimed the role of technology in identifying investment opportunities. ‘We are advocates of active asset management because it allows us to identify and realise added value at scale,’ he concluded.
With regard to the Iberian Peninsula, Caruso underlined the good economic performance of Spain and Portugal, as well as the growing importance of tourism. Finally, he advocated the return of core capital to the market, not only in Spain, but on a European scale, as a way to regain stability.
Alternative financing and market developments: capital seeks efficiency and diversification
At the round table on financing in a changing market, leading representatives from entities such as M&G Investments, Citi, Apollo and Generali analysed the current dynamics of real estate lending in Europe and the growing role of alternative financing.
Edward Boots, head of property finance for continental Europe at M&G Investments, noted that ‘we are seeing increasing competition from alternative financiers, which are complementary to traditional banking’. In his opinion, although the approach of both financing channels is not the same, the demand for different solutions is increasing and is generating a more competitive market.
From Citi, Omar El Glaoui, managing director and co-head of real estate finance for EMEA, highlighted the bank's track record as a financier in the Iberian Peninsula, ‘especially in Spain’. He explained that we are still in a phase of normalisation of capital markets globally and, at the same time, ‘real estate is moving from being a static asset to behaving more and more like an operational asset, even in the more traditional asset classes’.
George Molesworth, managing director of credit at Apollo, noted that 2024 was a positive year for the firm, which closed deals worth approximately $6 billion. As for the evolution of leverage, he noted that ‘the level will always depend on pricing and the client's ability to achieve it’.
Stefano Lombardo, head of debt funds for Europe at Generali, spoke on video format and confirmed that their current focus is pan-European financing, including operations in Spain. They currently manage a portfolio with 2 billion in assets under management, focused on value-add type transactions. ‘The market has changed significantly since the pandemic: we came from a period of greater containment and, after Covid, there has been an increase in capital and greater openness,’ he said. Even so, he recalled that the European market has historically been dominated by traditional funders, although competition from private equity has grown significantly in recent years.
Omar El Glaoui added that there is now greater diversification of liquidity across banking, funds and other vehicles. ‘Investors are looking for more efficient ways to conduct their operations, and this is driving the rise of alternative financiers,’ he said. He also foresees a growth in lower leverage financing and alternative governance models, especially in rental housing projects.
Edward Boots insisted that alternative funders tend to be more cautious in protecting their investors' returns and capital, which translates into a stricter evaluation of deals. He also confirmed that M&G is seeing a growing interest from developers in this type of financing.
El Glaoui also reviewed Citi's track record in NPL (non-performing loans) investment, pointing out that, although historically they have been very active, including in Spain, in the last four or five years they have not found opportunities of the desired scale. ‘The businesses that have emerged in this period are very different from the ones we used to look for,’ he said.
Molesworth closed by highlighting a lesson from the pandemic: ‘People were much better prepared to deal with crises than we thought. El Glaoui concluded: ‘Many of us are going to have to start thinking more and more about real estate as an operational asset class.
Global geopolitics: European resilience, Asian vision and China's role in the new order
The round table ‘Geopolitical world balance at stake’, moderated by Enrique Losantos, CEO of JLL Spain, offered an in-depth reflection on the balances of power at the international level, with interventions by José Manuel Durão Barroso, former President of the European Commission, and Brian Wong, Fellow of the Centre on Contemporary China and the World at the University of Hong Kong.
Europe's resilience in the face of crises
Durão Barroso opened his speech with an anecdote about the euro crisis. In June 2012, during a meeting with chief economists from the world's leading banks - including Nobel laureates - he asked the chief economist of the World Bank what should be done about Greece. The answer was almost unanimous: ‘Greece should exit the euro immediately’. Only one was against it. When asked whether the single currency would survive such a crisis, the answers were split 50/50.
‘I tell this story because it shows that the resilience of the EU and Europe is much greater than many believe,’ he explained. Thirteen years later, the euro has established itself as the second strongest currency in the world, behind the dollar and ahead of the yuan and the pound. No country left the eurozone. ‘Not Greece, not Portugal, not Spain, not Italy. Europe has shown a real capacity to strengthen itself in crises’.
Mr Barroso recalled that Italy was the real tipping point because of its economic weight: ‘My strong view was that the IMF should not intervene directly in Italy. It would have triggered alarm in the markets with a potential systemic effect’. Although Greece, Portugal and Spain were in difficulties, they did not have the same individual impact. ‘Italy was on the brink of intervention. Today, Portugal pays lower interest rates than France. ‘In this sense, yes, the PIGS can fly.
European Union: complexity and cohesion
On current tensions, Mr Barroso pointed out that during his term in office, the EU had grown from 15 to 28 countries. ‘This growth creates difficulties, but it also shows how, despite differences, we remain united. He gave the example of Hungary, whose position on the war in Ukraine is not aligned with the majority, but which does not have the capacity to block common decisions.
‘The EU is neither a state nor an international organisation like NATO. It is a very particular kind of political animal, with a degree of sovereignty of its own’. Although the media focus on disagreements, the EU, like the UN, constantly takes decisions. ‘One or two countries cannot change the European system, although it is certainly more complex to govern a union than a state.
Europe, he said, needs to make better use of its continental scale: ‘We have 27 financial markets. The problem is that we have not achieved the necessary coherence in capital markets’. Many governments don't believe in capital, and just as many don't believe in the markets,’ he ironised.
Brexit and the loss of global relevance
Barroso described Brexit as ‘a political mistake’, starting with the way it was presented. ‘It was badly conducted, without leadership and with poor communication. A pity.
On a geopolitical level, he considered that the UK has lost weight: ‘Who rules the world? The US, China and Europe - if it is understood as a bloc. Neither the UK, nor India, nor Japan are at the same level. And Russia, although it is big and has political weight, in economic terms is equivalent to Italy. The invasion of Ukraine was an attempt to project relevance.
Putin and the logic of power in Russia
Barroso explained that Vladimir Putin was the leader he met the most times: 25 in total. ‘He is not someone you can trust. He is capable of saying the exact opposite of what he is doing’. He recalled that during the invasion of Crimea, Putin denied the operation and claimed that, if it were real, Kiev would have fallen in less than two years.
‘He is a nationalist autocrat obsessed with holding on to power, convinced that he is protecting the Russian people from international humiliation.’
Nelson Mandela, Switzerland and political leadership
The leader who most impressed him was Nelson Mandela, whom he met when he was foreign minister of Portugal. ‘He was a leader in a different league. Charismatic without the need for artifice. He got people to take up his cause naturally’.
By way of contrast, he gave the example of Switzerland: ‘A country without charismatic leaders, but with an efficient political, economic, health and organisational system’. He closed his speech by quoting Fernando Pessoa: ‘Everything is worthwhile when the soul is not small’, and confessed that the most difficult role of his career was leading the opposition, rather than being Prime Minister or President of the European Commission.
China's political structure, according to Brian Wong
Brian Wong offered an Asian perspective focusing on China. He described a system characterised by a complex bureaucracy, where development is the result of constant negotiation between the Communist Party and civil society.
‘China has understood that invading other territories is not a smart strategy: it would lead to sanctions, conflicts and trade breakdowns. It is not its path to growth. He also rejected a repressive model such as that of Cuba or North Korea. ‘The challenge is to generate wealth and then distribute it. Power comes from collective aggregation’.
He acknowledged that poverty and inequality have affected millions of citizens in recent decades, but was optimistic: ‘The Chinese state does not revolve around a single person, but thousands of officials - many with international training and experience - who drive the country's progress’.
Trade war, reforms and domestic consumption
On the trade war with the US, Wong was clear: ‘It exists, and it is tough. But global trade is not limited to China and the US. The EU remains a key bloc, and regions such as Asia and Latin America have great potential, with young and dynamic populations.
He ironised about decision-making in some governments: ‘We should not have to choose sides just because the trade department seems to be run by interns consulting ChatGPT’.
Domestic consumption, he explained, is China's main economic driver. Chinese households save almost twice as much as American households. In 2023, the Party began to study pension reforms. In addition, it is considering a reorganisation of local financial governments. ‘The message has reached the top: action is needed, more bureaucracy is not enough.
Durão Barroso's Western view of China
Barroso took the floor to contrast the regimes in China and Russia. He described China as a nationalist technocracy focused on the collective, with a distributed power structure. ‘Unlike in Russia, power in China is not concentrated in one person, but is distributed among millions of highly qualified officials’.
He admitted that only a small part of the Western world understands China well, and stressed the importance of investing in that knowledge. ‘Paradoxically, the US and Europe sometimes have more centralised power structures than China.
He stressed that Europe is important for China, not only for goods, but also for services. ‘China is extraordinary in every respect’. He declared himself an advocate of global free trade and assessed Donald Trump's view on tariffs: ‘He sincerely believes that they benefit the US by bringing back industry, but that industry is not coming back. Some sectors are gone for good.
He closed by pointing out that the joint trade surplus in goods and services between the US and the EU is 50 billion, ‘and that's our big problem’.
Opportunities in BTR, BTS and flex living: between strong fundamentals and capital challenges
During the Spain Real Estate Summit, representatives from Hines, Oxford Properties, Azora, Testa Homes, AEDAS Homes, Aliseda | Anticipa and other industry players analysed the evolution of residential models in Spain and Portugal, such as Build to Rent (BTR), Build to Sell (BTS) and flex living. All agreed that the fundamentals of the Iberian market are sound, but structural obstacles, especially in access to land and financing, continue to limit the development of the sector.
A positive moment for Iberia
Pavlos Gennimatas, managing director of Europe Living at Hines, said that the Iberian peninsula is experiencing a very favourable moment: ‘The region has already proven its resilience and meets many requirements in terms of demand, liquidity and yields. He also indicated that core capital is gradually returning, not from other continents, but from Europe: ‘It's a step-by-step process.
Lee Coward, vice-president of investment at Oxford Properties Group, agreed that core capital is returning, but added clearly: ‘Will it be as cheap as we would like? No’.
Supply shortage and regulatory framework
Cristina García-Peri, senior partner at Azora, pointed out that ‘the big problem is the lack of residential supply, especially affordable housing and student housing’. She also identified senior living as a relevant growth area, given the country's demographic evolution. However, he warned about a differential factor that affects legal security: ‘In Spain, legislation allows a building intended for rental to be sold by units, and this generates insecurity not only for tenants, but also for investors’.
Juan Pablo Vera, CEO of Testa Homes, explained that some BTR projects are evolving towards flex living models due to the rising cost of capital: ‘Living in Madrid is becoming very expensive’. He also denounced that the country continues to face a structural problem: the scarcity of available land to develop affordable housing.
Land, capital and opportunity
David Martínez, CEO of AEDAS Homes, was clear: ‘The opportunity is huge, but the sector is highly penalised from a capital point of view’. He recalled that, although there was a real estate bubble in the past, the current situation is different: ‘The economy has grown, employment is stabilised and the banks that overcame the 2011 crisis have become much more disciplined in granting credit’.
He insisted that the lack of land is one of the main bottlenecks. ‘Some regional governments are starting to put land on the market for affordable housing. The conditions are starting to align, but the biggest challenge now is capital. And that is precisely why, for those who want to invest, now is the time’.
Eduard Mendiluce, CEO of Aliseda | Anticipa, underlined the importance of having asset managers with local knowledge: ‘You have to be close to the city, to the region where you want to invest. We work with a lot of data and with companies of all sizes to get to know the market well. He added that it is not always necessary to start with ready-to-build land: ‘With the right knowledge, we can buy land with transformation potential and capitalise on that opportunity.
Implementation strategies and scalability
Lee Coward explained that, for institutional investors like Oxford, the most logical thing to do is to start in the capital cities: ‘That's what we did in the UK, and once we gained experience and local knowledge, we were able to expand to secondary cities’. That strategy, he said, will also be valid for the Iberian Peninsula.
Pavlos Gennimatas spoke briefly to highlight ‘the beauty of the BTR model’.
Cristina García-Peri insisted that, when evaluating a location, it is not enough to look at market fundamentals: ‘Liquidity is also key. There are areas with solid fundamentals but very illiquid markets. In terms of portfolio, rental profitability in Spain is lower than in other countries. For this reason, he said, ‘you cannot compare yields directly without considering the context’. He also recalled that the rate of home ownership for rental by institutional investors in Spain remains very low.
David Martínez warned that ‘many developers and administrations do not think about the end user of the homes they develop’. He recalled that after the financial crisis many plots of land ended up in bank portfolios and this allowed developers access to good assets. ‘But that is not the normal situation of the market, and now it is working logically again.
Juan Pablo Vera added that, when looking for land, ‘we are no longer limited to large cities, we have expanded the radius’.
Lessons from the UK market and practices to be adapted
Eduard Mendiluce pointed out that there are still no BTS schemes defined for the Spanish market and that the real cost of capital and risk needs to be rigorously analysed. ‘In more mature markets such as the UK, there are more developed affordable rental formats that mitigate risk. The public administration should study these good practices and adapt them to attract more institutional capital.
Marta Cladera de Codina, Managing Director of Nuveen Real Estate for Iberia, spoke during the colloquium from the audience and pointed out that the market is moving towards more accessible rental models that are profitable for investors. He gave the example of student housing converted into tourist rental during the summer months. In his opinion, the BTR emerged as a formula to facilitate access to rental housing, and he recalled that they managed a portfolio of 3,000 units. However, he acknowledged that the model has had to adapt to the new market conditions.
Lee Coward remarked that ‘not all markets have such solid fundamentals as Spain, which means that the country continues to be very attractive for the living segment’.
Investment, CAPEX and sustainability
Juan Pablo Vera explained that Testa Homes has been investing heavily in CAPEX: ‘We have allocated 200 million euros to renovate units, 80 million euros to improve equipment, gardens and structures’. He also highlighted the possibility of developing BTS projects, which allows them to test the market and make more sustainable investment decisions.
Eduard Mendiluce added that they are committed to the retrofitting of flat blocks.
David Martínez pointed out that AEDAS Homes seeks to reach all models of the living segment: ‘Whether it is flex living, co-living... but we do it with our own equity’. He recalled that they have invested in Valencia, Barcelona, Madrid and Porto, buying buildings to convert them, and that the market fundamentals are still strong. ‘We are going to continue to invest as we have done so far, although the market has become more competitive, and this is reflected in prices.
Cristina García-Peri concluded by highlighting that ‘residences for the elderly represent a great opportunity’ and that ‘there is a lot of capital interested in student housing in Spain’. However, she also acknowledged that ‘today, for us, the biggest challenge is to invest more in rental housing: we manage 22,000 units, but it is difficult to explain to investors how to close the accounts, despite the good fundamentals’.