Spain climbed the ranking of the most attractive European countries for investors in 2023, coming in fourth, three places higher than the previous year when it was in seventh position. Spain is only behind the UK, Germany and France. In the city ranking, Madrid and Barcelona also placed higher, taking the fifth and sixth spots in the top ten most attractive European cities for investment, according to the American commercial real estate services and investment firm CBRE's latest 2023 Investor Intentions Survey.
Spain and Germany are the only countries with more than one city in this ranking, illustrating good prospects for the Spanish real estate sector. Moreover, both cities have climbed positions compared to the previous year. Madrid went from sixth to fifth, while Barcelona went from ninth to sixth.
The study highlights that southern Europe has been particularly active, with several European cities, including Madrid, Barcelona and Lisbon, among the markets attracting the most interest in 2023. On a European level, the UK has overtaken Germany.
According to the study, investors have a good outlook for 2023. Half expect investment activity to increase or remain stable over the year. Key challenges include fears of a recession, a mismatch between buyer and seller expectations and tighter credit conditions. High inflation is also a challenge for investors.
By sector, office is the most sought-after sector in Europe in a context where the return to the office is increasingly more prominent, although multifamily residential continues to close the gap. More specifically, 29% opt for offices, 25% for residential and 23% for industrial and logistics. To a lesser extent, retail and hotels, with 8% in both cases, and "other", with 7% of which a third opt for alternative residential assets.
The study also reveals an interest in alternative sectors. Approximately 70% of respondents seek exposure in at least one segment, with student accommodation standing out. Life sciences, mentioned for the first time in the survey this year, was the second most popular choice, followed by senior housing.
The current macroeconomic and geopolitical backdrop has not stalled the growing adoption of environmental, social and governance (ESG) criteria, and ESG compliance continues to top European investors' priorities. Eighty-one per cent of investors will continue to include them in all their investment decisions. According to the survey, a third of investors are willing to pay more for sustainable assets. In some cases, they can reach up to 20% above the market price. In contrast, only 4% do not plan to adopt ESG criteria.
Regarding asset type, of those preferring offices, more than half opted for Grade A offices in a prime location, while a third chose Grade B offices in a prime area. Regarding logistics, investors are split between older and modern assets in major cities. For multifamily residential, build-to-rent stands out for its strong appeal.
Retail parks remain very attractive, followed by supermarkets, the high street and shopping centres. On the other hand, more than half of the respondents chose full-service hotels.
According to the survey, reductions are expected across all asset categories, especially value-add offices, retail and logistics.
Understanding property tax in Spain for foreigners
For expats and non-resident buyers aspiring to own a home in Spain there’s a lot to learn. From understanding property tax in Spain to learning about the mortgage process and interest rates, there’s a lot of information you’ll need to cover before you put an offer in on your dream home.
Spanish banks will offer instant transfers from January
Banks are set to begin offering instant money transfers at the same cost as standard ones starting next month, following the government’s schedule for implementing this European Union (EU) initiative.
What do non-residents need to know about Spain’s mortgage law?
Spain is a dream destination for property buyers, offering an affordable and desirable blend of sun-soaked beaches, vibrant cities, and charming countryside retreats. With its warmer climate, relaxing lifestyle, and accessible property market, it’s no surprise that Spain consistently attracts buyers from around the world.
What is the deposit required for a Spanish mortgage?
Buying property in Spain is a dream for many, whether as a holiday home, retirement spot, or investment. However, understanding the deposit required for a Spanish mortgage is critical for properly planning your finances for the move.
Taxes on selling property in Spain
Today’s article mirrors our published article Taxes on buying property in Spain.
The Community of Madrid approves tax incentives for housing and foreign investors
The Madrid Assembly has given final approval to the tax incentive for foreign investors, along with a series of tax deductions for housing.
Valencia offers tax deductions for flood victims
The Valencian Council has approved a decree law establishing extraordinary tax measures to provide immediate support to families and companies affected by the recent floods for those taxes over which the Valencian Community has regulatory powers. Specifically, these are deductions in Personal Income Tax (IRPF) and bonuses in the inheritance and gift tax and the property transfer tax, among other measures.