Spain has established itself as a key destination for real estate investment. The domestic market is currently dominating discussions among international investment committees, including that of BlackRock, the world’s largest asset manager.
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According to Adolfo Favieres, managing director of BlackRock in Spain, speaking at a conference held at the Madrid Real Estate Exhibition (SIMA), “Spaniards have never had a moment like this. You talk about Spain in your investment committee and you see smiling faces.”
According to the executive of the American firm, “the landscape has completely changed” in recent years: “Italy is the new Germany, France is the new Italy… The rest of Europe is upside down, and we are clearly the star of Europe in our sector. We will see how long it lasts, but we have to make the most of it,” Favieres argued.
Javier Quintela, head of Iberia at debt manager Cheyne Capital, shares this view, stating that “Spain is an absolute priority” for investment committees. “A few years ago, it was a secondary focus, but over the last three years, we have seen an incredible shift. Now the question is no longer about yields in the UK, but in Spain. For the first time, Spain is Europe’s top destination – it has become number one.”
Felipe Pérez, head of Praemia REIM Spain, also highlighted Spain’s growing appeal to investors, noting that “in the last year and a half we have received mandates to invest in Spain”, and that there are “funds raising capital solely to invest in Southern Europe”, particularly in the domestic market. “This was unthinkable six years ago,” the executive emphasised.
Executives explained that this leadership in real estate investment reflects solid and stable fundamentals, such as economic growth among the strongest in the developed world and institutional stability, which allows “business plans to be fulfilled”.
Furthermore, they do not observe opportunistic operations in the market, “not even remotely”. Instead, what they see are development opportunities, “value‑added” and core+ strategies, with no signs of distress in the sector.
A diverse investment profile with a focus on living
The three executives explained that they are seeing interest from a wide range of investors, including US family offices, Asian funds seeking to diversify their portfolios, and capital from the Middle East looking for “safe” markets amid geopolitical tensions such as the conflict in Iran. In this context, Europe stands to benefit as an investment destination. Interest is also growing among domestic private investors, “who are investing heavily in Spanish real estate,” the BlackRock managing director noted.
Regarding the most in-demand segments, the head of the French asset manager Praemia in Spain highlighted the living sector and healthcare assets, driven by demographic trends such as an ageing population, as well as the ongoing housing shortage.
In their specific case, the focus is “on expanding in the healthcare segment, which includes hospitals, nursing homes and disability centres – in short, everything related to dependency,” said Felipe Pérez. He added that healthcare is a segment with “strong demand”, although it remains relatively niche.
BlackRock, on the other hand, is focusing on student residences, hotels, homes for sale and flexible living, although it still intends to enter the affordable housing sector, as it indicated a year and a half ago.
“We haven’t finalised anything yet, but we are very interested. We believe that affordable housing will eventually become social infrastructure and that significant investment from infrastructure funds will flow into it. We see a huge opportunity,” explained Adolfo Favieres.
Cheyne Capital, for its part, acknowledges that its main activity is also in the living sector. However, although it would like to have a stronger presence in residential property, “we are more focused on alternatives such as flexible living or student residences”.
The firm also highlights its interest in logistics and hospitality, noting that “Spain is Europe’s leading hotel destination”. It confirms its intention to enter the affordable housing market as well, although not in the short term.
No immediate storm clouds
Executives also agreed that, for now, the domestic real estate market does not face any major risks linked to a potential shift in the economic cycle, although much will depend on how the conflict in Iran evolves and its economic impact.
“Something happens every year. There are always black swan events, but the real estate cycle continues to perform well. Capital remains active, and I see no reason for this to change,” concluded the head of BlackRock in Spain.
