In Spain there is a shortage of housing in the rental market, while more and more people are opting for this type of accommodation. This demand is attracting professional investors such as investment funds, institutions and developers to create a new offer specialising in 'living', which includes not only rental housing, but also student and senior residences.
A study by the consultancy firm Knight Frank states that the volume of investment up to September already exceeds that of the whole of 2021 by 60%. Forecasts for Europe as a whole estimate that an additional 151 billion euros will be allocated to the 'living' sectors between now and 2027.
The study is based on surveys of 44 institutional investors, currently active in the living sectors in Europe and managing residential assets worth a combined 70 billion euros across the continent. For the real estate consultancy, the study shows that "Spain continues to be a country with an enormous attraction for investment".
In its analysis, it confirms the shortage of rental housing when more and more people are opting for this type of accommodation. Currently, they say, 25% of households live in rented accommodation compared to less than 18% five years ago, and another 200 basis points are expected to be added to this figure over the next five years.
The Knight Frank study states that the volume of investment in Spain up to September already exceeds that of the whole of 2021 by 60%. The main investors include investment funds, institutions and developers, which have accounted for 40%, 23%, and 20% of total investment so far this year, respectively.
Yields in the housing sectors continue to outperform other asset classes. As in other European markets, rising inflation is a concern as interest rates rise, although the lack of new housing supply may mean that the development sector is more protected from rate rises, and banks continue to provide funding.
Knight Frank expects investors to be more selective, but yields in the housing sectors remain higher than other asset classes such as government bonds or fixed income. Strong demand coupled with a lack of investment projects has led investors to focus on creating long-term partnerships with local developers with the aim of reaching the level of potential experienced in other EU markets and creating economies of scale in different living assets across the country, the study notes.
