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yields, which compressed at the end of 2024, will continue to tighten in the near term. • Investment interest in the retail sector will continue, supported by the e- commerce slowdown and improvement in existing assets focused on customer experience. Annual retail sales growth of approximately 3.5% is projected for 2025, driven by rising private consumption and tourist arrivals. • Living's main challenge will continue to be supply, which will continue to meet only half of demand, straining access to housing, but will position itself as the preferred sector for investment. A 5.3% growth in house prices is forecast for 2025, with around 680,000 sales. • Tourism will continue to be a key driver of the economy, and the hotel segment will experience moderate growth in travelers, with a 3.4% increase and increases in ADR and RevPAR. Interest in the luxury market will persist, while more economical proposals and other alternative segments (Branded Residences, serviced apartments, and glamping) will be developed. • The focus on ESG will continue to revolutionize the real estate sector, promoting the adoption of renewable energy technologies and sustainability standards across all asset classes. • Despite the uncertain geopolitical context and the impact of tariff measures on global trade, the outlook for the agribusiness sector in the Iberian Peninsula remains positive. In 2024, Iberia reached the top position in agricultural production value in Europe, achieving record figures. It is the most
institutionalized investment market, with growing geostrategic appeal. Spain ranks second among European countries with the highest expected total property returns for 2025, surpassed only by the United Kingdom. This strong position is driven by the economic appeal of Madrid and Barcelona, which have attracted significant interest from investors. Notably, Madrid ranks second and Barcelona fourth in the list of the most attractive cities for cross-border investment. 2025 Trends: Investors’ preference for the residential sector (32%), which has surpassed the logistics sector (27%) and offices (16%). Retail and hotels were chosen by 10% and 9%, respectively. Last year, logistics led the way (34%), followed by residential (28%) and offices (17%) as the preferred real estate sectors for European investors in 2024. This shift is driven by expectations of increased tenant demand over the next three years. Additionally, the logistics and hotel sectors also stand out as key areas for capital allocation due to their attractive pricing levels and projected improvements in returns. The Living sector stands out as the most attractive for real estate financing, both from banks and alternative lenders.
ILN Real Estate Group – Buying and Selling Real Estate Series
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