Latin American investment continues to rise in Madrid's real estate market

A surge of capital into Spain

In recent years, Latin American investment in Spain has reached record levels, particularly in Madrid’s real estate sector. The Spanish capital has even been dubbed the ‘new Miami’ due to its increasing appeal among high-net-worth individuals from Latin America. In 2024 alone, investment from the region surpassed €523 million, a dramatic rise from just €22 million in 2019 (CBRE). According to the Global Latam 2024 report by ICEX-Invest in Spain, the country is the fourth most attractive destination for investments from Latin America. Spain recieved more than 66.8 billion euros from Latin American companies, and in 2023, investment increased by 138% with this trajectory set to continue rising.

Countries such as Mexico and Brazil are leading the charge. In 2023, investors from these two nations alone accounted for €434 million in real estate acquisitions, spanning offices, shopping centres, hotels, and residential properties. A recent high-profile deal includes Brazil’s Safra family’s takeover of Árima for more than €220 million.

Madrid: The epicentre of LATAM investment

Madrid has become the primary European destination for Latin American investors, second only to the United States on a global scale. The city’s attractiveness is reinforced by its strong economic fundamentals, high-quality lifestyle, and significant Latin American community. Today, 14% of Madrid’s population—over one million residents—is Latin American, according to Spain’s National Institute of Statistics (INE). This cultural affinity makes Madrid a natural choice for investors seeking both economic opportunities and a familiar environment.

Why Latin American investors are choosing Madrid

Several key factors are driving the surge in Latin American capital inflows into Madrid’s real estate market:

Geopolitical stability: Spain offers a safe and predictable investment environment compared to economic volatility in Latin America. Political and financial instability in countries like Argentina and Venezuela has fuelled an exodus of capital into Spain.

Cultural and linguistic affinity: Shared language, legal frameworks, and business customs make transactions smoother for Latin American investors.

Market opportunities: Madrid’s property market is booming, with significant activity in luxury residences, commercial real estate, and hotels. High-net-worth investors see Madrid as a secure and profitable long-term investment.

Higher returns: Compared to real estate markets in France and Germany, Spain offers higher yields, particularly in hospitality and retail properties.

Fiscal benefits: Introduced in January 2024, the so-called Mbappé Law provides a 20% tax deduction in the Madrid autonomous regions Personal Income Tax (IRPF) for foreigners or returnees moving to Madrid. The main objective of the law is to encourage foreign investment and generate a poditive economic impact. ‘Beckham’s Law’ allows expats to be taxed as a non-Spanish resident, so only being taxed on income they earn in Spain, and not on income they may continue to earn elsewhere in the world. There are also tax benefits specifically for higher incomes.

High-Profile Investments & Market Trends

Major acquisitions continue to highlight the growing importance of Latin American capital in Madrid. A recent standout deal is Mexican group Besant’s €100 million acquisition of a landmark property on Alcalá Street. High-profile investors like Carlos Slim have also reinforced Madrid’s status as a premier destination for Latin American wealth preservation and growth.

Madrid’s retail and hospitality sectors have been particularly strong post-pandemic, attracting large-scale investments. In 2022, €29 million was invested in Spain’s retail sector, setting a record, and the trend has continued into 2024 with renewed interest from Latin American buyers. Luxury properties in Barrio de Salamanca, Chamberí, and Chamartín are in high demand, with some developments exceeding €10,000 per square metre (Idealista).

Conclusion: Madrid’s growing role as a LATAM investment hub

Madrid has cemented itself as the leading European destination for Latin American real estate investment. The combination of economic stability, cultural familiarity, strong returns, and new fiscal incentives like Mbappé’s Law makes the city an unrivalled choice for investors seeking growth and security.

As investment from Latin America continues to break records, Madrid’s real estate landscape will be shaped by this influx of capital. With key investors already making high-profile acquisitions, this trend is set to reinforce the city’s position as a premier global investment destination for years to come.