Commercial real estate in Spain - statistics & facts
Spain’s diverse economy and flourishing tourism sector have earned it a prominent position in the European commercial real estate market. Since 2015, the country has enjoyed an increasing value of foreign direct investment (FDI), fostering a favorable business environment. Nevertheless, Spain has also been affected by the economic headwinds experienced in 2022 and 2023. Globally, geopolitical tensions, slower economic growth, and higher interest rates have caused a decline in commercial real estate investment. As a result, in the third quarter of 2023, prices for commercial real estate fell close to a decade low.
Despite a challenging economic climate, business confidence in Spain has remained stable, with minor fluctuations. The Spanish commercial real estate market has shown resilience, capitalizing on a robust performance in the hotel and living sectors.
How large is Spain’s commercial real estate sector?
Spain has the fifth-largest commercial real estate sector in Europe, with the size of the commercial real estate market estimated at 650.5 billion U.S. dollars in 2023. The country also ranked among the markets with the largest value of commercial real estate investments in Europe, totaling 7.1 billion euros. Similarly to the rest of the region, the sector shrunk markedly in 2023 after economic headwinds brought up a cautious sentiment among investors. Despite that sentiment, gateway markets, such as Madrid and Barcelona, continue to attract investment. According to industry experts, Madrid was the European city with the third-best overall prospects.What types of properties are investors targeting?
In 2023, hotels were the most active asset class, with 30 percent of commercial real estate investments. Spain is among the leading tourist destinations worldwide and has notably benefitted from the rebound in the hospitality industry after the COVID-19 pandemic. Revenues in the hotel sector have recovered since the pandemic, with the revenue per available room (RevPAR) reaching an all-time high in 2023. Spain’s appeal is not only limited to the hospitality but also the living sector. Investment into alternative and residential assets accounted for 33 percent of all investments in 2023. That can be explained by the country’s high quality of life, favorable climate, and excellent healthcare system.Despite a challenging economic climate, business confidence in Spain has remained stable, with minor fluctuations. The Spanish commercial real estate market has shown resilience, capitalizing on a robust performance in the hotel and living sectors.
