Economic Growth and Investor Sentiment: Spain’s commercial real estate (CRE) sector is gradually recovering, driven by strong investor sentiment in 2024. The country's GDP growth, projected at 2.8% in 2024, exceeds the European average, supported by robust domestic demand and a resilient labor market.
- Retail Sector: Retail assets in Spain are gaining investor interest, particularly in Madrid and Barcelona, due to a resurgence in tourism. The retail sector recorded a notable 79% year-on-year growth, making it the second most sought-after asset class.
- Hospitality Sector: Tourism recovery has made the hospitality sector a major focus, capturing the largest share of capital in the Spanish CRE market (26% in the nine months leading to September).
- Office Market: The office sector remains slow due to post-pandemic tenant adjustments, reflecting cautious demand.
Market Metrics
TIME Score: Spain's all-property TIME score improved in Q3 after a period of stability, driven by positive economic sentiment linked to investment volumes. Enhanced REIT performance and strong prime returns contributed to this improvement.
Leading Sectors: Logistics leads with a TIME score of 3.5, followed closely by retail and offices at 3.4. The office and retail sectors entered the inflection phase in Q3 2023, indicating a favorable investment phase.
