Multi-family homes boost Spain’s property recovery

The ‘multi-family’ residential property market is a sub-sector of the European market and one that is attracting significant investor interest in Spain. This is unsurprising given the solid growth we’ve seen in Spain’s residential property sector, which is predicted to continue to grow over the next five years. Add to this a strong rental market in Spain’s major cities and you have a scenario that is bound to bring in investors.

New approaches to this market sector are popping up in response to investor interest. For example, Testa Residencial asked shareholders to vote on floating the development on the Spanish stock exchange, according to a report called ‘Go for Growth’ from Green Street Advisors.

Demand for rentals on the rise across Spain

Green Street’s report points to the fact that residential rental values hit bottom in 2016 and since then recovery has been solid. Furthermore, demand for rental properties is on the rise and the report estimates an annual growth of around 4% annually as the Spanish average, but if you’re looking at Madrid or Barcelona, that figure is double.

There are of course some downsides in this rosy scenario. The British and Spanish prefer buying to renting, and the supply of rental properties is low, although there are fewer barriers at the moment to delivering new builds for rental purposes. Another possible fly in the ointment is the decision by a growing number of local governments to put a cap on the renting out of private homes to tourists.

However, demographics support the need for more rental accommodation and the trend for Spaniards to rent has increased from 10% to 15% over a decade. Although Spaniards would prefer to buy, loan conditions and a still rather weak labour market don’t support that preference. Indeed, Green Street predicts that the total demand for rental homes will be in the region of 265,000 between 2018 and 2022.

Green Street also suggests that investors in multi-family residential properties in Spain may expect an IRR of around 6%-7% in Spain’s biggest cities and an average yield of 3.5%. This puts the multi-family residence at the top of the investment league table in terms of risk-adjusted expected returns.

 

Adam Neale | October, 2018



New
Development
Sotogrande, Off plan first-floor luxury apartment for sale in the exclusive community of Village Verde, next to La Reserva Club Sotogrande

Off plan first-floor luxury apartment for sale in the exclusive community of Village Verde, next to La Reserva Club Sotogrande

Ref. TMNA1304

  • 2 beds
  • 2 baths
  • 181 m² built
  • 65 m² terrace

Village Verde is nestled within an 18-hectare site of wooded parkland and is a much sought after development of apartments, penthouses and townhouses. This contemporary first-floor apartment is luxuriously...

490,000 €
New
Development
Sotogrande, Off plan luxury penthouse for sale in the ultra-exclusive community of Village Verde, adjacent to La Reserva Club Sotogrande

Off plan luxury penthouse for sale in the ultra-exclusive community of Village Verde, adjacent to La Reserva Club Sotogrande

Ref. TMNA1317

  • 4 beds
  • 4 baths
  • 524 m² built
  • 204 m² terrace

Village Verde is nestled within 18-hectares of wooded parkland and is a desirable community of apartments, penthouses and townhouses. This contemporary penthouse is luxuriously appointed with a spacious...

1,080,000 €
New
Development
Sotogrande, Off plan luxury ground floor apartment for sale in the tranquil community of Village Verde, next to La Reserva Club Sotogrande

Off plan luxury ground floor apartment for sale in the tranquil community of Village Verde, next to La Reserva Club Sotogrande

Ref. TMNA1324

  • 3 beds
  • 3 baths
  • 288 m² built
  • 123 m² terrace

Village Verde is a gated residential enclave within 18-hectares of wooded parkland and features apartments, penthouses and townhouses. This contemporary ground floor property is luxuriously appointed with a...

640,000 €
New Listing Estepona, Elegant 2 bedroom duplex penthouse for sale in the prestigious beachfront development of Costalita, New Golden Mile, Estepona

Elegant 2 bedroom duplex penthouse for sale in the prestigious beachfront development of Costalita, New Golden Mile, Estepona

Ref. TMXA1023

  • 2 beds
  • 2 baths
  • 102 m² built

Located in the gated and secure complex of Costalita and a short stroll from the beach, this stylish and low maintenance duplex penthouse has been upgraded to the highest standards with no detail overlooked....

399,000 €
Reduced Nueva Andalucia, Stunning 2017 new construction architectural villa for sale in Los Olivos, Nueva Andalucia, Marbella

Stunning 2017 new construction architectural villa for sale in Los Olivos, Nueva Andalucia, Marbella

Ref. TMXV08163

  • 5 beds
  • 5 baths
  • 660 m² built
  • 1.350 m² plot

Situated in the upscale development of Los Olivos in Nueva Andalucia, this elegant yet sleek home is designed to reflect the artistic and architectural combination of great taste, luxury finishes, and...

2,250,000 € - Reduced from 2,425,000 €
New Listing Benahavis, 2 bedroom apartment for sale in superb condition with garage and storage room in Las Mozas, Benahavis

2 bedroom apartment for sale in superb condition with garage and storage room in Las Mozas, Benahavis

Ref. TMRA11396

  • 2 beds
  • 2 baths

This very well presented apartment is positioned in the community of las Mozas, walking distance to the village of Benahavis and all amenities. The complex is situated at the entrance of Benahavis town...

279,500 €
New Listing Estepona, Sophisticated duplex penthouse with private pool in the exclusive beachfront complex of Los Granados del Mar, Estepona

Sophisticated duplex penthouse with private pool in the exclusive beachfront complex of Los Granados del Mar, Estepona

Ref. TMXA1116

  • 4 beds
  • 4 baths
  • 380 m² built
  • 173 m² terrace

This light, bright, and spacious duplex penthouse just footsteps from the sand boasts contemporary finishes throughout for the ultimate in modern luxury living. The property is well-distributed featuring a...

1,950,000 €
New Listing Marbella Golden Mile, Plot with sea views and project and license in progress for sale in the highly desirable Las Lomas del Marbella Club, Marbella Golden Mile

Plot with sea views and project and license in progress for sale in the highly desirable Las Lomas del Marbella Club, Marbella Golden Mile

Ref. TMXP0705

  • 1.034 m² plot

Located on the prestigious Marbella Golden Mile, this is one of the last remaining large residential plots available in the coveted pocket of Las Lomas del Marbella Club and represents excellent value. The...

1,300,000 €
New Listing Marbella Golden Mile, Plot with sea views and plans and permits in progress for sale in the highly sought after Las Lomas del Marbella Club, Marbella Golden Mile

Plot with sea views and plans and permits in progress for sale in the highly sought after Las Lomas del Marbella Club, Marbella Golden Mile

Ref. TMXP0706

  • 1.018 m² plot

Situated on the ultra-prestigious Marbella Golden Mile, one of the last remaining buildable plots has become available in the coveted pocket of Las Lomas del Marbella Club and represents fantastic value. The...

1,300,000 €
New Listing Estepona, Plot for sale in Estepona old town less than a minute from the beach

Plot for sale in Estepona old town less than a minute from the beach

Ref. TMRP1125

  • 242 m² built
  • 145 m² plot

A superb plot in one of the best locations in the old town centre of Estepona, positioned close to the beach and situated in the heart of the centre. The plot offers the opportunity for a very large...

350,000 €