Insights

Spain to End 2025 Strong in Living, Retail, Hotels, and PBSA

Spain’s real estate market is on track to close 2025 with positive results across several key sectors, according to JLL’s latest report. Despite a macroeconomic environment marked by uncertainty—international conflicts, volatile inflation, and high construction costs—the firm highlights the sector’s resilience and the opportunities available for investors who can identify specific trends in assets and locations.

The strongest performance in Spain is expected in living (residential), retail, hotels, and alternative assets such as Purpose-Built Student Accommodation (PBSA). Forecasts point to higher tenant demand, increased revenues, and reduced space availability. Similar dynamics are also taking place globally: retail is set to expand in the U.S., Canada, the UK, India, and Australia, while hotels will show strong performance in markets such as Germany, China, and India.

A major challenge for Europe will be limited supply, driven by corporate cost-cutting and rising construction expenses. This is expected to intensify competition for high-demand assets, with the exception of data centers, where stock will grow, though demand will remain intense.

JLL also emphasizes that investment agility will be essential in the months ahead. While many investors have been cautious, the need to reposition portfolios and capture returns will continue driving activity. Japan is a clear example: in the first quarter of 2025, investment volumes exceeded €11.6 billion, a 23% year-over-year increase.

The office segment faces mixed dynamics. Although the preference for in-person work is growing, many companies are delaying decisions to control costs. At the same time, the risk of obsolescence is becoming critical: more than 400 million square meters of office space across 66 markets require substantial upgrades. Renovations are increasingly seen as necessary not only to attract tenants but also to reduce energy use by up to 40%.

Finally, decarbonization has moved from being a sustainability goal to a core operational and risk management priority. Companies are now focusing on energy efficiency and resilient assets as essential strategies for long-term performance