Madrid: The Best Property Investment Destination in 2025

Madrid has climbed from 8th to 2nd place among the most attractive European cities for investment since 2020, surpassing Paris and now ranking just behind London. Meanwhile, Barcelona has dropped out of the top ten to 11th place. The ranking was prepared by PwC and is based on its annual "Emerging Trends in Real Estate Europe" report.

Madrid's rise coincided with the appointment of José Luis Martínez-Almeida as mayor and Isabel Díaz Ayuso as President of the Community of Madrid in mid-2019. These political changes significantly improved the city’s investment climate.

According to international investors, Madrid has become one of the most attractive locations for investment in Europe – second only to London. Other cities in the top ten include Berlin, Munich, Amsterdam, Milan, Frankfurt, Hamburg, and Lisbon.

Barcelona, governed for many years by left-wing and separatist parties, introduced numerous restrictions on foreign investment – particularly in the hotel sector – contributing to its fall outside the top ten for the coming year. Rome ranks 19th, and no other Spanish city appears among the top 30.

PwC's report highlights that Madrid's ascent is the result of favourable macro- and microeconomic developments and a high quality of life. Since 2020, Madrid has moved steadily from 8th to 2nd place – the best performance in its history.

The analysis is based on 1,143 interviews with key industry representatives, including developers, investment funds, institutional investors, and financial institutions.

Investors assessed cities based on economic growth, market size and liquidity, development potential, transport infrastructure (airports, rail), and overall quality of life.

Among the most promising investment sectors, respondents prioritised data centres. This infrastructure is attracting attention from energy firms (e.g., Iberdrola), construction giants (e.g., ACS), and institutional investors. According to Savills, Madrid has the necessary energy capacity and physical space to support this growth, and by 2024, its data centre capacity is expected to increase by 54%.

The second most preferred investment sector for 2025 is energy infrastructure, followed by student housing and logistics.

Rental Potential and Demand – Madrid

We receive several to a dozen or more inquiries daily from contracted relocation companies across Europe, the United States, and Latin America. Daily rental rates for properties of similar standard and location in Madrid range from EUR 250 to 500, depending on length of stay, number of guests, and time of year.

Considering the growing demand for corporate and mid-term stays in the Spanish capital, we are confident in the high investment potential and strong tenant turnover for your property.

Naturally, short vacancy periods may occur – this is typical in the short-term rental market – but the high rates associated with corporate and relocation stays usually offset occasional days without bookings.

We cooperate with dozens of the world’s largest relocation agencies and B2B platforms that serve corporate clients. Registering a property in their reservation systems is a demanding process – typically taking several weeks – but once completed, the apartment begins to generate stable and attractive returns.

Why P&O Apartments Group?

Since 2015, we have specialised in managing short-term and corporate rentals. Unlike most operators, we do not seek mass-scale expansion – our mission is to collaborate selectively with property owners and maintain the highest service standards tailored to the needs of relocation and corporate clients.