During recent years, the interest of many investors in investing their savings in the real estate market to achieve high returns has been growing. Thus, investment funds have proliferated in that market, as financial vehicles to pool capital from multiple sources, pursuing benefits through rental income and the revaluation of properties.
These investments can be homes, offices, shopping and logistics centers, and even more recently data centers.
Real estate investment funds can be direct -they invest directly in physical properties-, indirect -they invest in companies in the real estate sector-, or listed public investment companies in the real estate market – the so-called SOCIMIs, which are equivalent in Spain to REITs (Real Estate Investment Trusts) -.
Spain is one of the countries in the world with the most SOCIMIs -more than a hundred-. Their rise is linked to the special tax regime that governs them, designed to bring retail investors closer to the ‘brick’, a type of asset historically reserved for large capitals.
This tax regime was created in 2009, and later, in 2012, it was modified to bring it into line with that of international REITs. This is how great companies were born, such as Merlin Properties and Colonial resurfaced, among others. Besides, Large international funds have proliferated, increasing their presence in Spain.
The 2008 crisis marked a turning point in the international real estate market. Spain, Ireland, Portugal and Greece, countries made cheaper by the recession, became more attractive destinations for foreign capital.. The explosion of the real estate bubble left banks and savings banks with millions of euros in toxic assetsfrom unpaid mortgages to unfinished real estate developments.
Between 2012 and 2018, more than 500,000 homes were transferred due to foreclosures due to non-payment of mortgages from banks to funds such as Blackstone, Cerberus, Lone Star o Goldman Sachs.
Currently, more than 185,000 rented homes in Spain have large companies as landlords. Half of them are owned by foreign banks and American investment funds. In the vast majority of cases, the direct owner of the home is a Spanish subsidiary that the US fund controls through a business network that passes through Luxembourg, the Netherlands, the Cayman Islands or Delaware, territories with tax benefits or that allow financial movements in a rapid and often opaque manner.
The objective of maximizing the profitability of the shareholders of the SOCIMIs or the investors of the funds, who consider homes like any other financial investment asset, clashes squarely with the objective of providing homes at affordable prices to citizens.
The funds try to obtain the highest returns from the rentals of the homes and through the purchase and sale of these they try to obtain the highest capital gains. Meanwhile, Access to housing is increasingly difficult.
The movements of investment funds do not by themselves explain housing problems such as rising prices, the shortage of affordable housing, the increase in tourist apartments or gentrification, but they have contributed to changes in the sector in recent years.
Since the pandemic, housing prices have risen well above the general increase in prices. More specifically, between the second quarter of 2019 and the second quarter of 2025, while the CPI has increased by 21.6%the general housing price index has risen by 43.5%.
Precisely, since the massive entry of investment funds into the housing market in 2013, housing prices, both second-hand and especially new, have grown well above the CPI.
Evolution of Housing Prices and the General Price Index (4th quarter 2013 to 2nd quarter 2025)
Likewise, rental prices have continued to trend upward in recent years. According to the Rental Observatory (of the URJC and the Safe Rental Foundation), the evolution of the average rental income price has grown by 35% since 2019.
Evolution of average rental price in Spain
At the same time, the returns of Spanish SOCIMIs and investment funds have increased drastically. REITs pay 80% of the income they obtain via dividends every year, and are giving between 6% and 12% of annual returns.
In short, the Spanish real estate market has experienced important transformations in recent years, and one of the actors that has gained the most prominence are SOCIMIs.
Some countries are adopting regulations that make the right to decent and affordable housing compatible with investment in real estate assets: among others, the imposition of caps on rental prices, special rates for unoccupied properties, restrictions to prevent the hoarding of properties or changes in the taxation of residential SOCIMIs to only allow advantages to those companies that invest only in social housing.
We will see if these regulations encourage funds to withdraw from the rental market by selling their homes, if they see their current large returns in danger.
*** Mónica Melle Hernández is a professor of Economics at the UCM.
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