DISCLAIMER: This post was last modified on 12 June 2024. Some information in this article may not be updated.

Spain has always been regarded as one of the top investment destinations for wealthy investors from Latin America. According to a report by the Spain Export and Investment (ICEX) and Ibero-American General Secretariat (SEGIB), Latin American investments amounted to 68 billion EUR in 2022, representing 11 per cent of Spain’s foreign investments. Giant LATAM companies from Brazil, Mexico, Argentina, Chile, Colombia and Peru have already set up shop in Spain. Quoting ICEX, “The dynamism of Latin American investment around the world was confirmed in 2022, reaching record levels and 75% higher than the previous year.”  

But beyond corporate investments, investors from the region are pouring money into the EU nation’s real estate sector at record rates. FDI data showed that since 2020, Mexicans have invested more than 700 million EUR in the Spanish real estate and construction sectors.  

Spain as a gateway to Europe and Africa 

Establishing a presence in Spain through real estate investments is a strategic move that allows investors to penetrate more than just the local market. The country’s proximity to both Europe and Africa provides real estate investors with easy access to these large consumer markets. In addition, Spain’s excellent transportation infrastructure allows LATAM investors to travel efficiently to and from these regions for business-related trips.  

Demand for alternative residential and commercial spaces 

Changes in work setup caused by the COVID-19 pandemic have affected the demand for commercial spaces. Still, according to a recent GRI report, “Central Business Districts have maintained robust growth in investment,” driven by high rental incomes and stable occupancy rates. The report also noted an opportunity to offer residential spaces for a new and fast-growing market segment: students and seniors.  

Spain recorded a 43 per cent increase in the population of international students (2015-2022), which drives the demand for student housing and office spaces in Madrid, Barcelona and Valencia, where major universities are situated.  

In addition, senior housing in Spain may be an exciting venture for LATAM real estate investors. Twenty-two per cent of Spain’s population comprises senior citizens whose average income (as of 2022) was 22,347 EUR. Almost a quarter of Spain’s senior population is considered high-income. 

Growth, diversity and high rental yields 

The Spanish property market has consistently grown and stabilised in recent years. Figures from Statista show the residential real estate market in Spain will reach USD 5.44 trillion this year and is expected to experience a CAGR (2024-2028) of 2.35 per cent, with a market volume of USD 5.97 trillion.  

Due to Spain’s geographical characteristics, the market also offers a diverse range of properties from which LATAM investors can choose. In central areas, market actors can invest in residential or commercial properties to rent out for high rental yields. This guide shows that the average gross rental yield in major Spanish cities is 6.17 per cent as of 2024 Q1. A studio apartment in Madrid has a rental yield of 7.14 per cent. In Barrio de Salamanca, Spain’s luxurious neighbourhood where the wealthy flock, a one-bedroom property has a 5.92 per cent rental yield.  

In coastal areas, LATAM investors can put their money into beachfront properties as their holiday rest houses or as a means to diversify their portfolios. According to Statista: “The demand for luxury beachfront properties in Spain has skyrocketed, with international buyers flocking to the country’s coastal regions.”  

Conclusion 

The growing interest of LATAM investors in Spain’s real estate market goes beyond the cultural and linguistic ties of the region and the country. Spain has an alluring property market that offers various business opportunities for foreign investors, specifically those from Latin America.  

If you are a LATAM investor who wants to diversify your international portfolio through a property in Spain, our dedicated team in Madrid can help you navigate the market. From consultation to filings and property management, Bolder will assist you in every step to ensure your successful entry or expansion into Spain’s real estate scene.  

To begin, contact our team in Spain.   

Bolder Group does not provide financial, tax or legal advice and the information contained herein is meant for general information purposes only. We strongly recommend that before acting on any of the information contained herein, readers should consult with their professional advisers. The Bolder Group accepts no liability for any errors or omissions in the information, or the consequences resulting from any action taken by a reader based on the information provided herein.

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