Investment funds, real estate developers, and even government agencies have found this growing trend to be an attractive way to invest in housing.

The Spanish real estate market has always had a certain preference for homeownership. However, difficulties in accessing housing, the state of the job market, and limited savings capacity have driven a paradigm shift. The rise of the rental market has spurred the development of new models such as “build-to-rent.” This growing trend—which is simply the practice of building properties specifically for rental—saw investment triple in 2019 alone.

Originating in the United Kingdom and now well established in other European countries and even in the United States, this model not only offers a new alternative in terms of real estate investment but also professionalizes a market segment that, until now, had been dominated by small landlords. That is, in fact, one of the defining characteristics of “build-to-rent”: the professionalization of the rental market.

The developer is responsible for building the homes, but it is the investor who manages them. Generally, a single owner holds title to the properties, and professional management and maintenance ensure not only that the properties are occupied but also that they remain in good condition and retain their appeal over time.

Another difference from traditional rentals is that these are designed for the long term. The goal is for the tenant to feel comfortable, and consequently, for turnover of homes and occupants to be minimal. The design of the properties thus caters to all kinds of needs, since the profile of potential tenants is very diverse. Families with children, digital nomads, singles… Not only is a distinctive style of housing promoted in terms of materials, layout, and amenities, but all kinds of extras are also offered so that tenants can find a home tailored to their needs, complete with high-quality additional services at competitive prices.

Why it’s a growing trend.

Although experts have been analyzing the “build-to-rent” phenomenon for some time, the truth is that, from the perspective of end users—or, in other words, tenants—it is a relatively recent trend. In any case, the reasons behind the rise of this housing investment model are varied, though experts point to the shortage of rental properties and their high prices as two of them.

In any case, this model offers advantages for both investors and tenants —a factor that, in practice, is also contributing to the success of this type of real estate investment. For investors, the main appeal lies in the return on investment. In the current climate, the real estate market continues to be a safe haven, and rental yields remain above 5% on average—a notable difference compared to other financial products that have ceased to be attractive to investors.

But “build-to-rent” projects are also attractive to tenants, as this model provides access to well-maintained housing at very competitive prices.

Culmia’s “build-to-rent” projects

Committed to quality, energy efficiency, and sustainability, Culmia could not afford to sit on the sidelines of a growing trend like “build-to-rent.” Barcelona, Madrid, and Palma de Mallorca are just a few of the locations where the developer plans to build more than a thousand rental units. In fact, in mid-March, it completed its first “build-to-rent” development, which includes 68 units and nearly 5,000 m² of retail space.

The development, named Vila Bonaplata, is located in the Marina del Prat Vermell neighborhood, and as Jaume Borràs, the company’s business director, explains, “This development has it all: high-quality, efficient, and sustainable homes that offer a wide variety of shared spaces where residents can relax, unwind, and take care of themselves without leaving home. It’s the perfect choice for living in Barcelona.”

The capital is another location where Culmia is developing build-to-rent projects. In this case, it is doing so through the Plan Vive initiative launched by the Community of Madrid. Through this initiative, the regional government plans to develop nearly 25,000 rental units in 40 municipalities across the region over the next eight years.

A constantly evolving real estate market

While it is true that “build-to-rent” is a growing trend, it is not the only one trying to gain a foothold in the sector. The model has grown exponentially in recent months, but the real estate market continues to explore alternatives to meet users’ new needs.

While “build-to-rent” projects are particularly appealing to young people, those over 65 are the focus of what has come to be known as “senior housing” —that is, housing alternatives that have little in common with traditional retirement homes. In these cases, what is offered is a housing model in which residents can enjoy their time while sharing common services such as catering, housekeeping, and medical care.

And there’s more. With the rise of new trends in remote work and the growing possibilities for users, concepts such as “corporate living” and“co-living”—which focus on sharing spaces—are also beginning to gain popularity. For now, however, it seems that the “build-to-rent” model is gaining ground over other trends whose influence is just beginning to be felt in our country.