During the third quarter of 2022, Living has registered transactions worth 1,306 million euros, which represents a growth of 74% of the investment recorded in the same period of the previous year and exceeds the total invested during the whole of 2021 by 25%. Living accumulates 3,761 million euros so far this year and accounts for 26% of total investment in the real estate sector in Spain, according to CBRE data.
"This sector concentrates the largest real estate investment in Spain. Our country is still a market with little supply compared to demand, hence the great potential of Living, which maintains a very positive performance trend during this quarter and will continue to yield prominence to alternative sub-sectors with a long way ahead," said Javier Kindelan, Vice President CBRE Spain & Head of Living.
83% of the investment comes from investment funds, developers and insurers. Germany (29%), the Netherlands (24%) and the United States (18%) were the leading investors, while domestic capital accounted for 8% of the total.
Residential investment leads Living investment
The residential investment segment (BTR and PRS) accounted for 47% of the total amount invested in Living, with EUR 1,772 million up to September 2022. BTR assets alone accounted for €1,135 million, 12% more than in the same period of 2021.
Student residences have reached a volume of €1,399 million until September 2022 (37% of the total investment in Living). "In these assets, the acquisition by the PGGM fund of the RESA residences platform, for a value of around €850 million, has had a major impact", explained Samuel Población, National Director of Residential and Land CBRE Spain.
On the other hand, the Co-living sector has represented 13% of the total invested in Living, with a total of 503 million euros invested in the last nine months of the year. Up to September, 15 transactions have been registered, mobilising close to 4,200 beds in complete buildings throughout Spain.
Lastly, the Senior Living segment continues to become more professional in Spain, with four transactions totalling close to 100 million euros in the third quarter.
Future trends
In the current context, CBRE points to a decline in housing demand in the coming quarters in favour of a greater preference for the rental trend. "We estimate that 500,000 new rental homes will be created by 2026, with this type of tenure accounting for 26.2% of the total," said Javier Kindelan, Vice President CBRE Spain & Head of Living, CBRE.
Prime yields were up 25 basis points in the third quarter, standing at 3.25% in Madrid and 3.50% in Barcelona at the end of September. "Our forecasts for the coming months point to a weaker trend in yields, and in fact, in October they have already risen another 10 basis points in both cities. Regarding the yields of less traditional segments of Living, they have maintained a stable trend, but the higher financing costs together with the sectorial and macroeconomic dynamism will end up stressing them", explained the Vice President CBRE Spain & Head of Living.
