The construction of new buildings for rent is becoming more and more consolidated in Spain. Known as built to rent (BTR), this product is fully professionalized in the United States, Great Britain and Germany, where it covers, above all, the needs of the young and retired markets, people who do not want to purchase a home, but rather settle down in a property whose qualities and features are superior to those of the second-hand rental market.
The data in Europe are quite positive. In Germany alone, the property development companies Vonovia and Deutsche Wohnen offer 500,000 BTR homes in buildings or gated communities with first-class shared services such as covered parking, large gardens, playgrounds, swimming pools, gymnasiums, and security-controlled access, among other advantages.
For real estate development companies, a great window of opportunity is opening up. According to data gathered at the sector event The District, held in Barcelona in October 2022, the Spanish economy will grow between 1.2% and 1.3% this year, a situation that will not generate employment but will not destroy it either and, therefore, will not pose a threat to the real estate sector. In this regard, then, Jorge Pérez de Leza, CEO of Metrovacesa, considers that “one of the assets with the best projections, even with the slump that is expected over the coming months, is built to rent. In Spain, only 10% of new homes are destined for rental. That is, approximately 8,000 homes, which is totally insufficient to meet the current demand.”
An ideal product for resorts
The implementation of the built to rent strategy in luxury resorts in Spain has yielded excellent results, and significant growth is expected in the coming years. Facilities such as Abama Resort in Tenerife have opted to build turnkey apartments with top-brand fixtures, furniture and appliances, which their owners can use for holiday rentals to generate income. In this business model, a company specialized in hotel management is responsible for the management and maintenance of the vacation rental apartments and offers tourism services to the guests. These temporary residents also benefit from resort amenities such as golf courses, tennis courts and restaurants, among others.
A resort’s BTR portfolio includes not only apartments with shared-use spaces such as gardens and swimming pools, but also much larger villas with private facilities that ensure greater comfort and well-being for the owners and guests.
As experts in real estate development, at Arum Group we work on projects that, in addition to providing vitality to the destinations, add value to all the investments and generate very nice long-term profits. On terrain zoned for tourism rental, the built to rent product is undoubtedly one of the most successful ideas for different reasons:
- It is a very attractive product for people of retirement age who are looking for a return on their investment without renouncing the possibility of occupying their home at different times throughout the year.
- It caters to professionals looking for a property in a great destination with premium services for teleworking and leisure.
- It offers families the possibility of having a second residence in a closed, quiet, safe and secure space with a variety of facilities.
Thanks to the solid state of the real estate industry in Spain, it is not surprising that foreign investors are betting on our property developers for the construction of built to rent projects of proven profitability. This product that not only generates profits for its owner but allows for tourists to enjoy high quality properties as rentals.
