According to the latest report by consulting firm Cushman & Wakefield, European Hotel Investor Compass, Madrid, Barcelona, and Valencia have ranked among Europe's top priority cities for investors. Southern Europe as a whole and the Iberian Peninsula in particular has emerged as the most sought-after destination for hospitality sector investments, surpassing even established markets like the UK and France in terms of investor interest.

📌 Key figures from the report:

— Record-high interest: 78% of surveyed institutional investors expressed "high" or "very high" interest in hotel investments in Italy and the Iberian Peninsula (Spain and Portugal), placing the region at the top of the European rankings.
— Leading cities: Among Europe's key gateway cities, Madrid is named one of the most attractive markets, alongside Milan, Rome, London, and Paris.
— Overall sentiment: 86% of investors plan to allocate at least as much capital to European hotels in 2026 as they did last year, while 58% intend to increase their investments. Notably, 54% of respondents plan to be net buyers of assets.

💼 Why Spain is taking the lead: The country's success stems from a combination of strong fundamentals and high market liquidity:

— Tourism flows: Spain continues to break records in tourist arrivals, recovering from the pandemic faster than many competitors—directly boosting hotel profitability (RevPAR across Europe grew by 3.9% in 2025).
— Demand diversification: Strong interest extends beyond hotels to living assets residential rental properties, student housing, and senior living facilities. Major Spanish cities continue to face a structural shortage of quality rental housing, ensuring stable cash flows.
— Market maturity and liquidity: Unlike some Eastern European markets, Spain offers institutional investors a transparent legal framework and a substantial volume of ready, high-quality assets suitable for large-scale transactions.

⚠️ Despite its leading position, investors remain cautiously optimistic:

— Higher return expectations: The average required Return on Equity (RoE) for hotel projects in Europe has risen from 13.6% in 2025 to 15.6% in 2026, reflecting a higher risk premium amid geopolitical uncertainty.
— Rising costs: Escalating construction costs remain the top challenge 68% of respondents cited this as a critical issue. This may constrain the launch of new development projects, particularly in the luxury segment.
— Geopolitical backdrop: Macroeconomic and geopolitical risks (including escalation in the Middle East) were identified as the second-most significant concern, potentially impacting tourist flows and investor sentiment.

📊 On our website, you can explore real estate opportunities in Madrid, Barcelona, Valencia, and other regions of Spain — whether for personal residence or investment purposes.