Real Estate Investment in Spain Grows 39% in Q1 2025, Surpassing €3.3 Billion

Spain leads real estate growth in Europe, driven by strong performance in the living and retail sectors

Real estate investment in Spain saw exponential growth in the first quarter of 2025, reaching a total volume of over €3.3 billion, representing a 39% year-on-year increase, according to CBRE. This growth significantly outpaces the European average of 6% and highlights the dynamism of the real estate sector across the Iberian Peninsula, where investment surged by 48%.

Spain: Europe’s second most attractive real estate market

According to CBRE's European Investor Intentions Survey 2025, Spain ranks as the second most attractive country in Europe for real estate investment, just behind Germany. Madrid and Barcelona remain key hotspots, ranked as the second and fourth most attractive European cities for investors, respectively. Meanwhile, Lisbon holds steady in eighth place, underscoring Portugal’s relevance in the regional market.

Living and retail sectors drive 65% of real estate activity

The living sector led the market with €1.13 billion invested in residential assets during Q1—representing a 189% year-over-year increase. Investor interest focused on affordable housing and student accommodation, including standout deals such as the award of seven lots in Madrid’s Plan Suma Vivienda.

The retail sector followed closely, with over €980 million in transactions, driven by major deals like the sale of the Bonaire shopping center in Valencia and 50% of intu Xanadú in Madrid. These two deals accounted for more than half of the total retail investment volume, with CBRE advising both transactions.

Madrid and Barcelona: Hubs of real estate investment

Madrid and Barcelona continue to dominate the market, accounting for 57% of Spain’s total real estate activity. Domestic investment led the way with a 49% share, followed by capital from South Africa (14%) and the UK (13%). The Valencia region also stood out, representing 14% of the total investment volume.

Sector highlights: Hospitality, logistics, healthcare, and office markets

• Hospitality sector: €560 million invested (17% of total), with strong national investor participation (56%), focused on Balearic Islands and Catalonia.
• Industrial and logistics: 134% year-on-year growth with over €400 million invested, led by the Flora portfolio sale to Mapletree.
• Healthcare: Nearly €98 million invested, including the sale of a hospital in Palma de Mallorca and several elderly care facilities.
• Office sector: While direct investment reached €85 million, repurposing transactions exceeded €127 million, targeting residential, hospitality, and traditional asset conversions.

Outlook for the remainder of 2025

Experts forecast continued growth throughout the year, supported by new assets entering the market, sustained interest from international investors, and a favorable economic environment driving real estate appreciation in Spain.