Madrid needs an investment of €10,000M to develop the largest urban land supply in Europe

Madrid needs an investment of €10,000M to develop the largest urban land supply in Europe
Presentation of the Madrid Trinity Project during MIPIM 2024

The Association of Real Estate Developers of Madrid (ASPRIMA) has presented the Trinity project at MIPIM, the most important international real estate investment fair, with the aim of explaining to investors why the Community of Madrid is the most attractive place in Europe to invest in housing production, as it has production capacity, financing capacity from banks and, above all, the largest pool of land under development that will become finalist.

ASPRIMA estimates that the investment needed to develop the urban areas that will provide a solution to the housing problem in the CAM, amounts to 10,000 million euros by 2027, of which 8,100 million euros will be allocated to traditional residential, 600 million euros to Flex-living projects, 600 million euros to student residences, 300 million euros to rehabilitation and 200 million euros to changes of use.

The presentation was attended by Carolina Roca, president of ASPRIMA, who highlighted the good functioning of the developer financing model by the banks in the Community of Madrid, which puts developers in a very strong position to be able to build the 40,000 homes a year needed.

Madrid Region: The best residential investment destination in Europe - "Proyecto Trinity”

From the private sector, Javier Kindelan, vice-president and head of living at CBRE Spain, explained the macroeconomic situation in Madrid, in comparison with other European cities such as Ille de France or London; Sandra Daza, general manager of Gesvalt, explained the projection of the Community of Madrid and the consequent demand for housing; Luis Roca de Togores, President of the Valdecarros Compensation Board, focused his presentation on the offer of the developments currently under management in the city of Madrid, and Alberto Valls, Financial Advisory partner at Deloitte, highlighted the region's investment opportunities and insisted that the time to enter is now.

Representing the Public Administration, Ramón Cubián, Director General of Land and Office of Madrid, highlighted that the developments currently under management will put 260,000 homes on the market; with a great territorial balance and 115,000 of them in the centre of the city. Lastly, José María García Gómez, Vice-Minister of Housing, Transport and Infrastructures of the Community of Madrid, explained the shock measures of the great Regional Housing Pact, highlighting the Land Law and the General Urban Development Plan, which will be possible thanks to public-private collaboration. In addition, he stressed that there will be no stress zones in the region and, therefore, there will be no limitation of rents.

The Association has highlighted that the urban developments currently in the pipeline will provide land for 260,000 dwellings, with an estimated population of more than 770,000 people, located in the south of the region. These forecasts have been made by the LandCam tool, promoted by ASPRIMA and based on data from its associates.

Madrid needs 175,000 homes

Over the last 20 years, the Community of Madrid has become an ideal place to live, with a population growth of 20.19%. This growth and the changes in housing typology required by the new generations (fewer children, more single-parent families and more separations and divorces) will mean, according to the INE, that the Region of Madrid will need to build homes over the next 14 years for 573,738 new households, which means there will be 3,210,726 homes in December 2037, with a construction rate of more than 40,000 homes per year.

To meet this demand in the Madrid Region, 75,000 homes need to be put on the market, to which the 100,000 units of pent-up demand should be added. In other words, 175,000 homes compared to a current production of 15,000 - 17,000.

After the 2008 crisis, a real reconstruction of the sector has taken place. New players have entered and the surviving companies have been strengthened. There is a rich ecosystem of developers, construction companies, cooperative managers, property management operators, consultants and appraisers.

Collaboration between public bodies (CAM and city councils in the metropolitan area) and private actors is excellent, as there is a large Regional Housing Pact promoted by the Community of Madrid and made up of 22 associations and professional associations in the sector. The presentation of Trinity at MIPIM by the highest representatives of the public and private sectors to international investors is proof of this.

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