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Where the sector got it right, where it got it wrong, and where we still see disciplined entry points.
Where the sector got it right, where it got it wrong, and where we still see disciplined entry points.
Build-to-rent in Iberia is, depending on the desk you ask, either the structural growth story of the decade or a cautionary tale about institutional capital arriving five years late. We think both descriptions are partial, and we think the truth — as is so often the case — sits in the underwriting detail.
The thesis that Spanish urban demographics support a sustained shift from single-family ownership to multi-family rental is, on the data, broadly correct. Household formation patterns, internal migration into the prime metros, and the gap between disposable income and entry-level pricing are all pointing in the same direction.
The thesis that the structural demand can be captured at any scale, in any submarket, on any cap rate, is the thesis that produced the 2022–2024 cohort of mispriced product. Capital arrived faster than the operating capability, the operating capability lagged the underwriting assumption, and the gap between pro-forma occupancy and stabilised occupancy turned out to be wider than the institutional model allowed for.
A handful of submarkets, a handful of operators, and a discipline around scheme design that respects the user the building will hold. We are not in a hurry. The cycle is not in a hurry either.