Better prospects in real estate investment in Spain for 2024 show a projected growth of 5 to 10 percent, aligning with the sector’s five-year average and reaching about 12.5 billion euros in volume, according to the Real Estate Market Outlook 2024 from CBRE. This forecast reflects a stable market trend and reinforces the sector’s ability to sustain activity despite a shifting macroeconomic backdrop.
Analysts highlight a new stage and evolving conditions, including an interest rate environment that diverges from recent years. The outlook suggests investment volumes will rise during the year, with stronger momentum likely as the year progresses, supported by a more stable capital markets climate across Spain. This perspective was shared by Paloma Relinque, director of Spanish Capital Markets at CBRE, during the research presentation.
In 2023, Spain experienced a 35 percent drop in trading volume compared with 2022, with totals over 17.6 billion euros, a year that had set a record. The overall value of real estate transactions last year reached 11.4 billion euros. While Spain maintained figures well above the European Union average, the decline impacted the market by around 48 percent. The late-2023 quarter showed buoyant activity and notable momentum, with expectations that the positive trend would extend into 2024, according to Míriam Goicoechea, Research Director for Spain and Portugal.
Volume of real estate investment in Spain from 2007 through 2024 is highlighted in the CBRE analysis, illustrating long-term shifts and recent growth patterns. This data underscores how the market has evolved and where capital is flowing within the sector, according to CBRE.
CBRE identifies sectors likely to see continued valuation corrections, notably in central locations. The performance of commercial facilities, office buildings, and logistics warehouses has shown muted returns in the face of higher interest rates, which in turn has driven downward adjustments in asset values. In this context, offices are anticipated to report the strongest yield improvement, moving roughly 0.3 to 0.4 percentage points upward, while logistics and retail assets are projected to rise about 0.2 to 0.3 percentage points, with some normalization expected on main street properties between 0.1 and 0.2 percentage points.
What asset types could attract more investment?
In 2023, hotels emerged as the most favored asset class, boosted by a wave of large foreign sovereign fund activity. The outlook for the year ahead suggests continued strong interest in these complexes as the market benefits from robust visitor demand. A record influx of international travelers supported favorable metrics for rates and occupancy, reflecting in higher revenue per available room (RevPAR) and average daily rate (ADR), as noted by market researchers. The majority of investments over the last year went toward holiday properties, around 66 percent, signaling a shift away from traditional urban cores but a continued appetite for prestige assets.
The housing segment also became a key driver, with approximately 3,000 million euros allocated to rental land and buildings, establishing itself as a leading segment behind hotels. Notably, around 41 percent of this volume targeted affordable rental housing, meaning units priced below market rates. CBRE projects that traditional home sales will decline by about 10 percent to roughly 554,000 transactions in 2024, yet price growth is expected to persist at an average pace near 3 percent.
Another sector expected to perform well in 2024 is the sector for parks and shopping centers, which has faced challenges from the rise of e-commerce in recent years. The market sees renewed consumer spending power supported by wage growth that could boost demand for commercial properties. Market researchers note that rental income and financing conditions are improving, which could sustain acquisitions and attract new capital as banks become more amenable to lending for property purchases. The shopping center segment is anticipated to surprise on the upside in 2024, with solid foot traffic and sales, attractive pricing, and favorable financing conditions for acquisitions contributing to a positive outlook for this asset class.