Living investment continues to grow in Spain, largely thanks to the multifamily segment, which includes PRS (Private Rented Sector) and BTR (Build To Rent). According to data provided by the international real estate consultancy JLL, investment in multifamily has exceeded 2,000 million euros in the first nine months of 2022, representing an increase of 17% over the same period last year.
This amount represents, between January and September 2022, 55% of the total investment in living, which totalled 3.7 billion euros, registering a growth of 41% compared to the same period last year.
For the third quarter, in particular, residential rental investment was around €200 million, a decrease of 62% compared to the same period in 2021, due to a lower number of transactions registered between July and September 2022. Compared to the second quarter, investment in the segment fell by 76%, as between April and June there were two significant transactions of around EUR 300 million, including the purchase of a portfolio of 740 homes in Madrid by the French insurer Axa, in which JLL participated as an advisor.
Among the most significant transactions in the third quarter were the acquisition by CBRE IM of a portfolio of 566 rental properties in Barcelona and Badalona from Culmia for 170 million euros; the purchase by AEW from Banco Sabadell of a building with 103 flats in Mallorca for 26.3 million euros; and the acquisition by AEW from Banco Sabadell of a building with 103 flats in Mallorca for 26.3 million euros; a development of 83 rental homes in Santa Perpètua de Mogoda (Barcelona), bought by Franklin Templeton from AQ Acentor, for 16.3 million euros, and the purchase of 57 subsidised homes in Arganda del Rey (Madrid) by Q Living, for a total of 9 million euros.
In terms of yields, rental residential has been the sector where yields have been most compressed since Covid. While investor appetite remains high, with solid and growing demand, yields have corrected upwards, influenced by historical rises in interest rates and bond yields.
In the current context, rising financing costs, economic uncertainty and high inflation are already having an impact on the slowdown in home sales, although sales rates remain reasonable. Forecasts are for rental demand to continue to rise, driven mainly by the younger population, although limited supply continues to drive prices upwards.
Juan Manuel Pardo, Director of Living at JLL Spain explained: "We are in a time of market adjustment in which joint venture transactions between developers and investors will prevail, although the BTR market will continue to occupy an important space. What is also important to note is that the fundamentals of the rental residential market remain very positive and liquidity remains high". Translated with www.DeepL.com/Translator (free version)