In an impressive first half of 2024, Spain’s real estate market has attracted over €4 billion in investments, with the hotel sector leading the charge, according to Cushman & Wakefield.
The first six months of 2024 have seen the hotel sector in Spain surpass €1.7 billion in investments, marking a 30% increase from the same period in 2023. This surge is a significant contributor to the total real estate investment volume of over €4 billion reported for the first half of the year, maintaining stability compared to previous quarters.
After a record-breaking 2023, the hotel sector is expected to continue its strong performance, with projections suggesting a total of €3 billion in investments by year-end. A notable highlight of this trend is the sale of the Hotel Six Senses Ibiza, which set a record price of €1.7 million per room in the second quarter.
Jesús Silva, Director General of Cushman & Wakefield Spain, emphasized the sector’s resilience: “The hotel sector, supported by robust tourism fundamentals and the dynamic behavior of major cities like Madrid, is positioning itself as the primary magnet for investor capital.”
The retail sector has also demonstrated a strong recovery, closing the first half of 2024 with over €1 billion in investments. This figure is a substantial increase compared to the €300 million recorded during the same period in the previous year. Significant transactions include the Isla Azul shopping center and the ASG Portfolio. High street retail also saw notable activity, such as the acquisition of the building housing WOW galleries on Gran Vía in Madrid.
Silva noted the renewed investor interest in retail: “This first semester shows a revived appetite for retail investments due to their yield differential compared to other asset types, highlighting their income stability.”
Historically the dominant asset class, office investments have faced a decline, with only €290 million invested in the first half of 2024, a 60% drop from the same period in 2023. The lack of available prime office space in central locations has reduced investor interest. However, there is a growing focus on assets with potential for conversion to residential use, particularly in Madrid. Noteworthy transactions include GMP’s acquisition of the Titán 8 building in Madrid, facilitated by Cushman & Wakefield.
The living and logistics sectors continue to show promise, driven by strong fundamentals. The living sector recorded €590 million in investments, compared to €1.69 billion in the first half of 2023, which included a significant €730 million portfolio sale from Via Célere to Grey Star. The logistics sector saw €350 million in investments, reflecting a 30% decrease from the previous year.
Cushman & Wakefield anticipates that total real estate investment in Spain could reach €8 billion by the end of 2024, especially if interest rates decline as expected. This outlook is buoyed by robust performance in the hotel and retail sectors, along with ongoing interest in living and logistics assets.
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