The new dynamics of residential tourism have captured the interest of Simed 2024, the Mediterranean Real Estate Exhibition that is being held at the Trade Fair and Congress Centre in Malaga from 7 to 9 November.
As part of the first day of its professional programme, the Forum on Opportunities and Trends in Residential Tourism, co-organised by Iberian Property and moderated by Arturo Malingre, Partner at Grupo Iberinmo, brought together experts from the sector to analyse both best practices and strategies for investing in new residential formats, driven by the growing demand for housing brought about by the rise in tourism and the increase in activity in the residential sector.
In this sense, Gemma del Corral, territorial delegate for Tourism of the Andalusian Regional Government in Malaga, welcomed the Forum attendees, highlighting the need to differentiate oneself in a tourist market with a competitiveness that has grown exponentially, where 1,300 million people cross its borders and 6,000 million participate in domestic tourism.
Thus, del Corral delved into the key factors that contribute to the competitiveness of the destination: ‘It is crucial to offer a safe and stable environment, not only from a legal point of view, but also in terms of access to quality services and infrastructure’. She also stressed the importance of a strong traditional tourism base complemented by features such as good connectivity, which is essential to attract digital nomads and other temporary resident profiles. The potential is immense, especially in quality formats. ‘The market for branded residences is expected to triple in the next five years, with the Costa del Sol as the main recipient of these new developments. In particular, Malaga will host 93% of the new supply. In this context, sustainability in the growth and development of these projects will be crucial to their long-term success and acceptance,’ she concluded.
Investment and development strategies to these emerging trends
With this panorama in place, the round table moderated by Arturo Malingre moved on to other industry leaders, who shared their perspectives on how to adapt investment and development strategies to these emerging trends.
Susana Rodríguez, commercial director and executive director at Savills, began by illustrating the remarkable transformation of the residential market in recent years. ‘In 2014, institutional investment in residential was anecdotal and barely represented 5%. Today, this figure has risen to 25%-27% of what is invested in real estate,’ said Rodríguez. This change not only reflects a growth in volume, but also a change in the nature of the transactions. In fact, according to Rodriguez, ‘currently, 60% of these investments are oriented towards alternative formats such as student residences and flex living, which respond to the changing needs of the population and investors’.
For his part, Jeffrey Sújar, Managing Partner of Urbania in Alternative Investments, addressed the limitations of urban planning, sometimes with processes established in the 1960s, pointing out how these have become obsolete in the face of the current needs of consumers and developers. Sújar explained that in order to overcome these limitations, tertiary land has begun to be used for collective residential developments, offering innovative formats with attractive facilities and proposals that not only offer a new lifestyle, but also promise high profitability. He also stressed that the concept of flex living, which has gained popularity, does not seek to replace traditional rental housing, but is presented as a more adaptable and temporary option, ideal, for example, for digital nomads.
‘Some 60% of these investments are geared towards alternative formats such as student residences and flex living’.
Following the discussion on adaptability in the residential sector, Isidoro Mínguez, director at Orion Capital Managers, has delved into the need to carefully understand the current market demand. Mínguez explained that the demand for residential tourism is evolving towards patterns that are less seasonal and more integrated into the residential lifestyle. He took the opportunity to highlight the three main vectors that are shaping this change: digital nomads looking to settle down, even with their families, the demand for mixed tourism uses, and a growing interest from people of retirement age looking for quality services in low-density environments.
‘In places like Sotogrande, these requirements are being met in an exemplary manner, attracting those looking for prestige brands and housing solutions tailored to their specific needs. In addition, we see a growing demand for options such as senior living and health-related formats,’ said Mínguez, highlighting how these characteristics make Sotogrande a model to follow in residential tourism.
On the other hand, Leticia Pérez, general manager at Dazia Capital, highlighted the opportunities offered by alternative housing models. ‘It allows developers to grow faster and open windows of opportunity. We are building platforms with defined terms and types of assets that respond to the current needs of society and provide immediate value to investors,’ explained Pérez. And she emphasised the importance of responding quickly to market changes, ensuring that the capital invested shows tangible results in a short period of time.
In the same vein, Rodriguez also stressed the importance of legal certainty and regulatory stability. ‘Funds are particularly concerned about legal stability, which is fundamental in a country where competences are so segmented. This certainty is vital, especially in new market segments where there are no precedents’. She also said that senior living will focus on the foreign resident, stressing the need for adequate infrastructure and quality healthcare services to support this segment.
‘Legal certainty is essential, not only to attract capital, but also to maintain Spain competitive with other destinations’.
Sergio Arana, Director of Real Estate at Urbanitae, analysed recent investment opportunities in new housing models: ‘In the last 18 months, we have seen an increase in opportunities to invest in the development phase of assets. The small investor is looking for certainty and profitability, hoping that these assets will later be sold to institutional investors’.
Jeffrey Sújar emphasised the need to provide a clear and flexible legal framework to attract more investment. ‘Legal certainty is essential, not only to attract capital but also to keep Spain competitive with other destinations. While Madrid and Valencia show a good investment ecosystem, Barcelona and other areas face challenges due to complex regulations and lack of available land,’ explained Sújar, who also stressed the importance of adapting to the demographic changes caused by the arrival of foreigners.
In this context, Isidoro Mínguez stressed that operational capacity is crucial to attract international investors. In turn, ‘sustainability is no longer just an added value, but an indispensable requirement for many investors, especially those from northern Europe’, said Mínguez, recalling that sustainable practices must be integrated into projects in order to meet the expectations of the global market.
Finally, Sújar closed the round of debate and expressed the importance of accompanying the good moment the sector is going through and its capacity for innovation with greater regulatory flexibility. ‘We are breaking down the mistrust that existed between the public and private sectors, opening up channels for dialogue. Spain is consolidating its position as the preferred destination for institutional investors, who could also contribute to solving the country's housing problem,’ he concluded.
As part of the institutional inauguration, Simed was attended by leading authorities and key figures, including Francisco de la Torre, Mayor of Malaga; Mario Muñoz-Atanet, Deputy Minister for Development, Territorial Planning and Housing of the Andalusian Regional Government, and Ignacio Peinado, President of FADECO Promotores.
During the opening session, the fundamental role of public-private collaboration in boosting the sector through innovative solutions that address the challenges of housing accessibility was highlighted. The agenda included important events such as the 2nd International Meeting on Protected, Social and Affordable Housing, which tomorrow will be complemented by the 2nd Forum on Public-Private Collaboration for Investment; the Simed-ACP Málaga Meeting Point; the 2nd Forum on Opportunities and Trends in Residential Tourism, and The House of the Future, whose programme will continue on the second day.