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Madrid and Barcelona, among the top 10 European cities to invest in real estate this year

Posted by Инна on 03.02.2022

Spain is once again one of the most attractive destinations for real estate investment in 2022. It has two cities in the top 10 in this year’s edition of the report, which is produced annually by the consultancy firm PwC and the Land Urban Institute.

Of the 31 major European cities that appear on the list, Madrid ranks sixth, after gaining two places compared to last year’s edition, while Barcelona re-enters the list of the top 10 most attractive destinations after improving four places to ninth place. Only Germany has more representatives than Spain in the top 10.

However, the ranking is headed by London, which this year steals Berlin’s place and is once again crowned as the most attractive city in Europe for real estate investment.

“The British capital is once again number one despite Brexit, almost 400 City companies relocating to the European Union, the UK’s tough pandemic confinements and the fact that it has little advantage over other European cities in terms of the most sought-after real estate assets. But the London market has depth and liquidity, and in the end what matters in times of crisis is stability,” says Richard Garey, partner in charge of Deals at PwC Real Estate.

Berlin is the second most prominent city on the list, followed by Paris, Frankfurt and Munich. Just behind the top five is Madrid, which rivals the major German capitals and outperforms Amsterdam, Hamburg, Barcelona and Brussels. At the other end of the table are Turkey and Moscow, which are the least attractive cities for large real estate investors.

The strengths of Madrid and Barcelona

This is the first time in two years that Spain’s two major economic and real estate hubs have managed to break into the top 10 of attractive investment destinations.

According to Antonio Sánchez Recio, partner in charge of the Construction, Real Estate and Services sector at PwC, the results are a sign that “investors are confident in the Spanish real estate market and are optimistic after seeing that the sector has successfully overcome the worst part of the pandemic. We also see that there is no turning back on the path of integral transformation initiated in the real estate industry, which comes from technology, organisational changes, a focus on asset and customer management, and the incorporation of ESG aspects into the strategy and business model of real estate companies. In Spain, operators are also seeing this clearly and know that this is an opportunity that they cannot miss as a sector”.

With regard to Madrid and Barcelona, the consultancy firm highlights several competitive advantages over other European metropolises, such as lower asset prices, a high level of quality of life and a lower cost of living.

In addition, the capital city stands out for its potential for the development of sectors such as residential and logistics, as well as for its good infrastructure network and the strength of its office market, while the Catalan city stands out for the possibilities offered by businesses related to technology and biomedical research, which are among the most sought-after real estate niches.

According to the report, investors’ favourite segments this year are those related to new energy infrastructures, facilities related to health sciences, logistics centres and data centres, which occupy the top four positions in the ranking. Rental housing, affordable housing and retirement homes are also among the top performers. The residential sector is, according to the study, “the traditional champion real estate sector in the field of stability”.

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