Compared to the rest of Europe, Spain has an appetite for home ownership — which affects investment options. 


Home ownership is a core feature of the Spanish national identity. While only 42% of Germans opt to buy their own homes, around 80% of Spaniards do. This may come as a surprise to many who are unfamiliar with Spain, particularly considering the economic turmoil the country has been through in recent years.

The tradition has such deep cultural and historical roots, however, that a financial blip on the country’s beautiful landscape cannot possibly eradicate it.

Cultural background, repercussions for investors

Borja Goday

“The strategy for our investors lies in refurbishments and value-add investments” - Borja Goday, MD of PATRIZIA Activos Inmobilarios Espana

In fact, the reasons are so ingrained in Spanish culture that it would be impossible to pin down one motivation behind the high owner-occupier rates. Strong family ties most certainly play a role. Often the extended family is involved in the purchasing of homes — and in occupying them, too. However, in itself this is not sufficient to justify the difference between Spanish home ownership and the average rates in northern and western Europe.

Is it down to fiscal regulations? The lack of alternative investment vehicles? The shortage of affordable rental properties? No doubt it’s a combination of all these factors why Spaniards step on the property ladder at an earlier age than elsewhere in the Eurozone. One thing is certain, the Spanish appetite for home ownership has a knock-on effect on the options for institutional investors.

The high percentage of homeowners here means that the profitability of rental is less than in other parts of Europe. We have the situation in Spain that an existing resi-portfolio generates a net yield of 3% at the maximum. That is why the strategy for our investors lies in refurbishments and value-add investments, which generate a much higher yield.

Bought, refurbished and on the market

The purchase of a specific refurbishment property in Madrid is a key example of such a value-add investment from PATRIZIA’s viewpoint. The nine-storey building, built in 1963 and with floor space of around 5,000 square metres, is situated in the Salamanca district, one of the best residential and shopping locations of Madrid in the north-east of the historical centre of the city. After an extensive refurbishment, the 14 premium apartments will be sold off individually.

Property prices in Spain have started to rise again following the crisis

We expect the apartments to be in great demand as there is always a high level of interest in high-end-quality freehold flats in this location in particular, one of the most elegant and prestigious residential areas in Europe, from both Spanish and foreign customers.

What makes the property particularly attractive, besides the exclusive location, is the fact that there is very little construction and refurbishment activity in progress in the Salamanca district.

Property prices in Spain have started to rise again following the crisis, which is why we are delighted to take advantage of this unique investment opportunity for our investors.

After seven years in crisis mode, during which the average price of residential property dropped almost 40% between 2007 and 2013, analysts at PATRIZIA believe the tide is slowly starting to turn, as the infographic based on their data below indicates.

Patrizia_Infografik Spain

Borja Goday, managing director of PATRIZIA Activos Inmobiliarios España

About PATRIZIA Immobilien AG

PATRIZIA Immobilien AG has been active as an investment manager on the real estate market in 15 European countries for more than 30 years. PATRIZIA’s range includes the acquisition, management, value increase and sale of residential and commercial real estate over own licensed investment platforms. As one of the leading real estate investment companies in Europe PATRIZIA operates as a respected business partner of large institutional investors and retail investors in all major European countries. Currently, the Company manages real estate assets worth around EUR 17 billion, primarily as a co-investor and portfolio manager for insurance companies, pension fund institutions, sovereign funds, savings and cooperative banks.