Spain Emerges as a Dynamic Player in Europe's Real Estate Recovery in 2026
Spain is poised for notable rental growth and investment activity in 2026, emerging as one of Europe's strongest real estate markets amid a broader continental recovery.
- • Spain is one of the most dynamic real estate markets in Europe in 2026 with strong rental growth in residential and logistics sectors.
- • Residential rents in Spain are expected to increase by 5.3% in 2026, surpassing the UK and Germany.
- • Madrid ranks among Europe's most active retail markets, with prime retail rents forecasted to grow 1.9% annually over the next two years.
- • The hotel and data center sectors are expanding robustly, supported by rising demand and technological trends.
Key details
The European real estate market is expected to experience a gradual recovery in 2026, underpinned by a stronger macroeconomic environment, stabilization in financing costs, and a reactivation of investment activity, according to the 'European Outlook 2026' report by Cushman & Wakefield. Spain stands out as one of the most dynamic markets within this cycle, with notable growth anticipated across its logistics, residential, retail, and hospitality sectors.
Rental growth in Spain is particularly strong, with residential rents projected to increase by 5.3% in 2026, surpassing forecasts for the UK and Germany. This increase is driven by residential demand outstripping supply. In retail, Madrid is recognized as one of Europe's most active markets alongside Milan and Paris, with prime retail rents forecasted to grow 1.9% annually over the next two years. The logistics sector is stabilizing, with prime rents expected to rise by 2.2% between 2026 and 2027.
Office activity is consolidating in central business districts, reducing availability and supporting prime rent growth. The hotel industry in Spain also remains vibrant, with Europe-wide hotel stays forecasted to grow by 5.6% in 2026 and Spain leading in hotel capital attraction. Additionally, data centers are expanding rapidly, propelled by AI and digital transformation, with an anticipated 32% annual growth rate in IT load from 2025 to 2030.
The report aligns with findings from the European Investment Atlas, showing that 78% of markets analyzed are still undervalued, indicating significant potential for price adjustments. This underlines the optimistic outlook for real estate investments in Spain as part of the broader European recovery.
In contrast with Spain's robust real estate outlook, tourism dynamics show a slowdown: domestic overnight stays dipped by 3.9% in 2025, while Spaniards traveled more abroad, increasing their spending overseas by 11%. This shift suggests evolving patterns in domestic demand but does not detract from the strength seen in Spain's real estate sectors.
Overall, Spain's real estate market is positioned to be among the most active and fastest-growing in Europe in 2026, attracting investment and seeing rising rental rates across key sectors, signaling a promising year ahead for property stakeholders within the country.
This article was synthesized and translated from native language sources to provide English-speaking readers with local perspectives.
