The Spanish real estate market is undergoing an unprecedented transformation. In a context where access to housing has become one of the main social and economic challenges, the Build to Rent (BTR) model has emerged as an innovative solution that is redefining the concept of residential renting.
Unlike the traditional market, where most developments are built for sale to individuals or small investors, BTR represents a paradigm shift, as it involves developing residential complexes specifically designed to be rented professionally and on a long-term basis. This model, already well established in markets such as the United States and the United Kingdom, is gaining strong momentum in Spain, driven by international investment funds, changes in consumer habits, and growing demand for flexibility among tenants.
In this article, we will explore not only the fundamentals of BTR, but also its real impact on the Spanish market, the opportunities it offers investors, the advantages for tenants, and the challenges it faces. With updated data for this year, we will examine how this model is growing in key cities, what sets it apart from the traditional approach, and why many experts consider it the future of the residential sector in Spain.
Build to Rent (BTR) is a real estate business model in which homes are built for the sole purpose of being rented, rather than sold. Unlike the traditional market, where developments are designed for sale to individuals or investors, BTR focuses on offering a high-quality rental product with additional services and professional management.
These projects are usually developed by large investment funds, SOCIMIs (listed real estate investment companies), or specialized companies, which retain ownership of the property and manage it over the long term.
The concept of Build to Rent has its roots in Anglo-Saxon markets, particularly in the United States, where operators such as Greystar and Equity Residential have been managing large professional rental communities for decades. However, it was in the United Kingdom that the model took its current form, especially after the 2008 financial crisis, when the British government implemented tax incentives to boost the construction of rental housing in response to the decline in mortgage lending.
In the 1990s and 2000s, the first projects were carried out in the US, with premium rental gated communities. From 2010 to 2015, the model expanded in the UK, with funds such as Legal & General investing billions. From 2016 to 2020, there was a strong expansion in Spain, with projects in Madrid and Barcelona. And from 2021 to 2026, there has been an explosion of the model in Spain alone, with more than €4 billion invested in 2024.
In Spain, BTR has found fertile ground due to the decline in young people’s purchasing power, which delays home purchases; labor flexibility, which encourages geographic mobility; and the professionalization of renting, which reduces conflict between landlords and tenants.
The design is intended for rental use, with more functional spaces, durable materials, and optimized layouts. It may include premium services such as gyms, swimming pools, coworking spaces, and 24/7 concierge service, which are present in 80% of BTR projects in Spain. In addition, they feature integrated technology.
Contracts last between three and five years, with the option to renew. The clauses are flexible, with the possibility of subletting in some cases. Rent increases do not come as a surprise, as they are usually indexed to the CPI, avoiding sudden spikes.
They have a stable yield of between 4% and 6% annually, higher than traditional rentals. There are fewer vacancy periods, as professional management reduces periods without tenants, and BTR buildings tend to appreciate faster than standard homes.
60% of BTR projects in Spain have green certifications such as BREEAM or LEED. They may also have lower operating costs due to solar panels, recycling systems, and home automation systems.
In the first phase, planning and development take place, with the selection of strategic locations close to transportation, business areas, and services. A rental-oriented design is considered, with greater emphasis on common areas and spatial efficiency.
In phase 2, construction and financing, the initial investment per home can range between €100,000 and €150,000 (depending on the city), and financing may come from institutional funds (70%), banks (20%), and crowdfunding (10%).
Operational management is then carried out by specialized companies such as Vivieno (Vonoiva) or Azora, which handle day-to-day operations. Revenue models are typically 80% residential rentals and 20% additional services such as laundry, parking, or commercial spaces.
Finally, there is a scalability phase, with possible expansion into new cities or diversification of spaces, including co-living, student housing, and senior living.
Spain has become one of the most dynamic markets for BTR in Europe, with a cumulative investment of €12 billion since 2020 and 18,500 homes in operation (65% in Madrid and Barcelona). The tenant profile is 70% young people between the ages of 25 and 40, with 50% foreign professionals (especially in Barcelona and Málaga).
The factors that have contributed to this growth are unmet demand, as Spain has a rental rate of 25% (compared to 35% in the EU), institutional support, as SOCIMIs benefit from a favorable tax regime (corporate tax rate of 15%), and international interest, as funds such as Blackstone, AXA, and Patrizia have portfolios of more than 5,000 BTR homes in Spain.
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The main cities with BTR projects are Madrid (Opera District, Arroyo del Fresno), Barcelona (22@, Glòries), Málaga (Málaga Nostrum), Valencia (City of Arts and Sciences), and Seville (Cartuja).
Developing a BTR project requires at least €50 million, which limits participation to large operators. In addition, there is limited land availability, and competition with traditional housing drives up prices.
According to the Housing Law, restrictions on rent increases in some autonomous communities affect profitability. There may also be tax changes due to possible revisions of the benefits granted to SOCIMIs.
80% of the supply is concentrated in Madrid, Barcelona, and the Costa del Sol, leaving medium-sized cities out of the picture.
During recessions, demand may decline, especially in premium segments.
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The outlook for BTR in Spain is optimistic, with several key trends, such as expansion into new housing types like co-living and senior living.
Technology and smart buildings are also being integrated, with 3D models to manage predictive maintenance, or tokenization using blockchain.
Growth is expected in secondary cities such as Zaragoza, Alicante, and Bilbao, which will be the next focal points, with higher yields (up to 6.5%).
And the trend sets sustainability as the standard. By 2027, 90% of new BTR projects will be carbon neutral.
Yes, as it offers annual returns of 4% to 6%, higher than other assets.
Funds, SOCIMIs, and large investors, although there are crowdfunding platforms for small investors.
Between 3.5% and 5%, depending on the area.
Yes, but it must comply with the Urban Lease Law.
In general, they include cleaning, maintenance, gym, common areas, and security.
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Build to Rent is a booming model that responds to new market demands, offering flexibility, services, and professional management. In Spain, its growth is unstoppable, attracting international investors and providing a real alternative to traditional renting.
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Funded:
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Objective:
2.456.653,39 €
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