Multifamily is one of the most popular real estate investment sectors in Spain with a significant increase in portfolio transactions and build-to-rent projects in recent years.

Historically, Spain is a country of buyers, but the proportion of households living in rented accommodation is growing. The rentership rate has increased by 4.7 percentage points since 2010, up to 24.9% in 2020, according to the latest data available from Eurostat. Spain saw the third-largest increase in home rentership in the EU over the period 2010-2020.

Rentership has jumped by over 15 percentage points for the under-29 age group according to the Spanish National Institute of Statistics. The lack of savings to afford a house purchase and the change in mentality explain most of this increase.

Population growth, especially in metropolitan areas, will likely continue to bolster the demand for rented accommodation.

Population in Spain is estimated to grow by 3% between 2020 and 2032 with Madrid growing faster at 5% according to Oxford Economics, while EU population will remain stable.

The growth potential of the rental housing market is attracting international investors and is encouraging the development of built-to-rent projects, in many cases with a local partner.

So far in 2022, Patrizia has agreed to invest circa €600 million on behalf of its clients in a high-quality Barcelona residential portfolio. It comprises 10 residential assets and consists of a mix of newly completed buildings and buildings that will be constructed this year. This acquisition comes shortly after the purchase in 2021 of two build-to-rent turnkey developments, one in Madrid and the other in the greater Barcelona area.

Allianz is also expanding its exposure to the private rented sector with the acquisition of a portfolio of nine prime residential buildings in Madrid for €185 million. It is its second PRS sector deal in Spain after it bought 421prime residential units in 21 assets located in Madrid and Barcelona through the purchase of a controlling stake in a joint venture vehicle, Elix Vintage, owned by several prime investors, in June last year.

In April, AXA IM Alts acquired, on behalf of clients, a circa €285 million residential portfolio in Madrid, from funds managed by Blackstone. The portfolio is spread across six residential assets, most of which have been recently refurbished, and offers a total of 740 units. The cities of Madrid and Barcelona and their metropolitan areas are the most popular investment destinations, but investors are willing to expand to other Spanish urban locations and are turning their attention to other locations with significant economic activity and strong real estate fundamentals such as Valencia, Seville, Pamplona and Málaga.

Primevest Capital Partners closedits second deal in Spain in March by acquiring a residential project in Valencia. The project will comprise two buildings with 90 residential units which will be built for rent and will be completed by the end of 2024.

Catella Wohnen Europa has also broken into Valencia market by buying, in May, two rental residential buildings for €66 million.

New types of rented accommodation such as coliving, serviced apartments or senior living are attracting increasing interest from investors.

In June, Greystar forward-purchased a flexible accommodation portfolio of 2,500 units in Madrid that will offer purpose-designed rooms and superior amenities including a gym, co-working space, pool, outdoor space and a dedicated concierge service.

Housing solutions are adapting to the evolving society's needs and household structure such as the growing number of people living alone. According to the National Statistical Institute, one-person households will grow by 18% by 2035, representing 29% of the total households, whereas households with 3 or more members are set to decrease.

Local councils are beginning to revise their regulations to try to adapt and reflect these new housing solutions that are in great demand from society. These regulatory changes would are likely to speed up the implementation of new housing models such as senior cohousing in Spain.