The rental surge is now a reality. In the past four years, investors—primarily funds and developers—completed the construction of 15,710 homes across Spain that are destined exclusively for the rental market. Between 2019 and 2023, delivery numbers surged more than 1,600 percent: 538 properties finished in 2019 versus nearly 9,600 in the most recent year, according to Atlas Real Estate Analytics, a firm focused on real estate data.
At present, most of the rental homes delivered are in the free market, with the share of protected or affordable units barely reaching 1,000 per year in 2022 and 2023. Although Madrid accounts for about two thirds of these new rental homes, other cities have also seen a rise in new-build rental stock: Barcelona houses 2,248 units, Valencia 1,136, Seville 690, Malaga 322, Cordoba 270, Palma 203, Tarragona 144, and Sant Joan d’Alacant 89 homes.
Affordable rental housing, the new trend
Atlas Real Estate notes that in 2023 a major driver of the rental housing market was investment in assets with rents considered affordable, meaning rates below market levels. Across different investors, 2,750 homes were transacted for a total value of 270 million euros, representing 34% of all residential investment, compared with 1,500 homes valued at 210 million the prior year.
These affordable rental properties are being developed largely through public-private collaboration plans. In this model, the government provides land at no cost, while private companies undertake construction and realize returns from pre-set rents.
This product fits the market because the effort required to pay rent in major Spanish cities has risen substantially due to higher prices and stagnant wages. On average, rent consumes more than 30% of household income in Alicante, Álava, Valencia, Madrid, Barcelona, Gipuzkoa, and the Balearic Islands.
Who are the major landlords in each region?
Atlas Real Estate’s report includes a ranking of the largest landlords across the four most populated communities: Andalusia, Catalonia, the Community of Madrid, and the Valencian Community. In all of these regions, significant funds such as Blackstone and Azora appear, alongside financial institutions like CaixaBank and Banco Santander.
CaixaBank leads the ranking in three communities Andalusia, Catalonia, and the Valencian Community with 7,800, 5,060, and 2,670 units respectively, in addition to about 4,770 units in the capital. Other banks with a strong presence in the residential rental market include Unicaja with 1,800 units in Andalusia, BBVA with 2,450 in Catalonia, and Banco Sabadell with 2,040 in the same region. Banco Santander is present in all communities except Catalonia, with 1,510 units in Andalusia, 1,500 in Madrid, and 490 in the Valencian Community.
Blackstone holds a substantial footprint with 13,130 units in the capital region, and a spread of 2,600 in Catalonia, 1,060 in Andalusia, and 2,600 in the Valencian Community. Cerberus also has a notable national presence with 2,600 units in Catalonia, 2,450 in Madrid, and 980 in the Valencian Community. Among Spanish managers, Azora, working with CBRE Investment Management, manages 4,640 units in the capital, plus 890 in Catalonia, 970 in the Valencian region, and 500 in Andalusia.
Regional groups also stand out, such as Indicesa with 920 units and Núñez i Navarro with 790 in Catalonia; Grupo Asan with 440 and General de Galerías Comerciales with 620 in Andalusia; and Crein with 320 in the Valencian Community.