The real estate market in Spain will consolidate its growth in 2025. CBRE, in its Real Estate Market Outlook 2025 report, forecasts that real estate investment in Spain will grow by 15% this year, reaching a total volume of 16,000 million euros, compared to the 14,000 million recorded in 2024. This increase, which could increase with the closing of corporate transactions, will continue the 20% growth path observed last year, placing it above the average for investment in the 2015-2019 period.
The return of international capital, lower financing costs and the attractiveness of the euro against the dollar are the main factors driving this dynamic. However, geopolitical uncertainty and the implications of the US economic agenda could generate some caution during the first months of 2025. According to Paloma Relinque, Head of Capital Markets in Spain at CBRE, ‘Lower financing costs will compress prime yields and incentivise investment. There is significant capital on the sidelines, mainly for value-add and opportunistic strategies'.
Prime returns and sector dynamism
Following upward corrections in recent years, prime yields peaked in 2024. CBRE anticipates a stabilisation in 2025, along with a progressive compression in sectors with strong fundamentals, such as logistics and living.
Miriam Goicoechea, Head of Research in Iberia at CBRE, said: ‘The real estate sector remains attractive, as shown by the gradual recovery in investment volumes. We expect rents to continue to advance at a good pace while prime yields, which have reached record highs in most products, will confirm the compression path initiated. We will also continue to raise funds focused on sectors with the strongest fundamentals, such as those linked to warehousing (logistics and data centres) and living in the various stages of life (student housing, multifamily and senior living), as well as debt funds'.
Key sectors for real estate investment
Living will continue to be the preferred segment for investment in Spain and Europe, attracting between 30% and 35% of total investment in 2025. Despite the forecast of 138,000 new building permits, supply will still be insufficient to meet demand, which will drive a 5.3% increase in house prices. Sales and purchases, on the other hand, will fall by 2.3%, stabilising between 600,000 and 650,000 transactions in the long term.
In the hotel sector, it is expected to represent between 20% and 25% of total investment, with a 3.4% growth in travellers and improvements of 4.7% in ADR and 5% in RevPAR. Luxury assets, conversion and mixed-use projects, as well as the economy segments, are set to be the most dynamic. There is also interest in less mature destinations and alternative segments such as branded residences and serviced flats.
Retail, which experienced a 121% increase in 2024, will account for up to 20% of total investment this year. CBRE projects a 3% increase in sales, supported by the recovery of private consumption and tourism. Rental demand will continue to drive prime rents upwards, with an average growth of 3% in the main commercial hubs.
In the office market, Madrid is expected to stabilise with 550,000 m under contract, while Barcelona could register a 20% increase in annual take-up. Midcaps and high quality assets in strategic locations will continue to attract investment. Change of use to residential or hotel, which reached 250,000 sqm in 2024, will remain a key trend.
In the logistics sector, national take-up exceeded 2.5 million sqm in 2024, 23% higher than in 2023. CBRE expects absorption to stabilise, while prime rents will continue to rise due to high demand and limited supply of new product. This sector captured between 10% and 15% of total investment in 2024 and will remain key this year.
Spain Real Estate Summit 2025: the event for investors looking for opportunities in the real estate market
In a scenario marked by sustained growth and the opportunities offered by the real estate sector in 2025, the Spain Real Estate Summit is positioned as the essential event to explore Spain's attractiveness as an investment destination and to address the global challenges that will define its future.
The event, which will take place on 6 and 7 May at La Finca UZalacaín, Madrid, will bring together more than 350 international leaders and investors to analyse the economic, political and market outlook in an environment designed to foster debate and innovation. Organised by Iberian Property together with CBRE and JLL, the event will consolidate its role as a strategic real estate forum.
The programme will feature presentations from influential figures such as James Seppala, Head of Real Estate Europe at Blackstone, who will open the event with his strategic vision of global market dynamics, backed by his track record of leading investments in the world's largest real estate portfolio. José Manuel Durão Barroso, former President of the European Commission, will also give his perspective on geopolitical and social challenges from an international perspective.
In addition, there will be parallel sessions dedicated to the most relevant segments of the market, such as living, retail, offices, hotels and logistics, allowing attendees to delve into the trends and strategies that are setting the pace in the Spanish and Iberian real estate sector.
The meeting will also include the Iberian Property Investment Awards 2025, a ceremony that will recognise the main operations and best practices in the sector in Spain and Portugal over the last year.
With a focus on strategic thinking, constructive debate and networking, the event is a must-attend event for those looking to be at the forefront of the real estate market. Access all the information at Spain Real Estate Summit.
