The ‘Living’ Sector Strengthens Its Leadership in Spanish Real Estate Investment in 2025

10/11/2025 – ⏱ 3 min

The ‘Living’ sector strengthens its leadership in Spanish real estate investment in 2025

This article is for informational purposes only and does not constitute, under any circumstances, investment advice or a recommendation.

The residential rental segment — known in the industry as “living” — has firmly established itself in 2025 as the main driver of real estate investment in Spain. This category, which includes build-to-rent (BTR), multifamily, coliving, student housing, and senior living projects, continues to attract the bulk of institutional capital, supported by steady rental demand and a persistent shortage of affordable housing in major cities.

According to the Market Outlook Q3 2025 report by CBRE Spain, investment in living assets reached €3.75 billion by September, accounting for 29% of total real estate investment nationwide. Behind it came the hotel sector (20%), offices (16%), and logistics (14%). These figures confirm that the rental residential market remains the preferred destination for capital, a trend that began in 2023 and has accelerated amid stabilising interest rates.

The sector’s appeal lies in its resilience to economic cycles and the predictability of rental income. The 12-month Euribor, Spain’s key financing benchmark, stood at around 2.2% in October 2025, easing funding costs for developers and investors. Combined with Spain’s macroeconomic strength — GDP growth projected at 2.6% for 2025 according to the OECD — and sustained job creation above 21 million workers, the environment continues to favour the long-term rental market.

The structural imbalance between supply and demand remains the driving force. Only 24% of Spain’s housing stock is available for rent, compared to 34% in the European Union, according to Eurostat. This gap, coupled with rising urbanisation, higher mobility, and changing generational preferences, is fuelling demand for institutional rental housing in consolidated cities. Madrid, Barcelona, Málaga, and Valencia account for more than 70% of investment activity, though Bilbao, Seville, and Zaragoza are emerging as secondary hubs.

Several high-profile transactions have marked the year. In July, Hines acquired 531 build-to-rent homes in Madrid, as part of a pan-European residential strategy. In November, Acciona Inmobiliaria sold 1,016 units in Madrid and Barcelona to the investment fund Argis, one of the largest living deals of 2025. These operations confirm Spain’s growing maturity as an institutional rental market and the solid positioning of the living sector within diversified real estate portfolios.

Gross yields in this segment range between 4% and 5%, above those of Western European markets, while demand for long-term rental housing remains robust due to limited access to mortgages despite a mild credit recovery. For global funds, Spain continues to offer an attractive balance of stability and return compared with France, Germany, or Italy.

However, structural constraints persist. The Ministry of Housing estimates that Spain must build 250,000 to 300,000 new homes per year to stabilise prices, yet only around 118,000 were started in 2024. Rising land costs and lengthy permitting processes — often exceeding 18 months in major cities — are still major bottlenecks. In response, public–private partnerships and collective investment models such as real estate crowdfunding are gaining ground, helping to finance smaller-scale developments and energy-efficient refurbishments.

The rise of the living sector is reshaping developers’ strategies. The traditional “build-to-sell” model is giving way to hybrid schemes that integrate long-term management and operational income. As Spain’s rental market continues to professionalise, the living sector is emerging as the cornerstone of a more stable, diversified, and institutional real estate cycle.

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