Like in Portugal, where refurbishment of historical buildings is now a high-margin, mainstream business, this sector has also taken off in Spain. Large cities such as Madrid and Valencia have experienced significant change, with entire neighbourhoods or barrios undergoing gentrification. As many of the areas on which we concentrate are also top tourist destinations, the demand is mainly for comfortable and more contemporary builds. Refurbishment of older properties is undertaken only with great caution by most international buyers and developers.

For the canny investor, opportunities in traditional neighbourhoods of larger cities and that are prime for gentrification, represent both capital appreciation and 5-8% yield opportunities. Some neighbourhoods of Valencia are prime examples.

On the other hand, Spanish lenders are open to negotiating discounts or quantity breaks for serial investors. In other markets balance sheet weakness prevents discounting. Spanish banks tend to accept that writing off some part of debt is a method of getting weaker inventory off their balance sheets. In this sense, it is the polar opposite of Portugal, where banks deals are generally unattractive. In Spain, negotiating with a bank is often commercially attractive but due to the sheer size of the projects, investors need to have deep pockets.

Crucial to finding and analysing opportunities will be to work with a partner, knowledgeable in the region’s potential growth areas. Talk to us about finding those opportunities which might be just below the radar. With so many real estate developments spread across the country, picking the right location and matching it to a target audience, is more important in Spain than in many other markets.