Salamanca Madrid investments

Salamanca is a district popular among both investors and residents: it has recorded the highest prices for buying and renting housing in Madrid, according to a study by consulting company CBRE.

The CBRE “Corazones de Barrio” report indicates that the Salamanca district maintains the highest cost per square meter of residential real estate in Madrid — over 5,700 euros at the end of 2020.

In terms of rental costs, the district ranks second after Chamberí — around 17.5 euros/month per square meter. However, due to the pandemic, rental rates decreased by 11% over two years, interrupting the growth trend observed until the beginning of 2020.

Salamanca has the lowest rate in Madrid for housing used as primary residence — only 75%, while the share of vacant properties is around 16%.

Paloma Relinque, director of CBRE in Madrid, explains this picture with two factors: buyers purchase housing in this district as an investment product rather than for permanent residence, and a significant portion of properties are old, unrenovated apartments in unsatisfactory condition.

According to CBRE data, limited availability of free land constrains new construction. Development projects are concentrated in the Fuente del Berro and Guindalera neighborhoods, where there are fewer protected buildings and large-scale reconstructions are being carried out.

Price Differences Between Neighborhoods

Prices vary significantly depending on the neighborhood. Guindalera and Fuente del Berro are the most affordable areas of Salamanca. In Recoletos, sale prices are twice as high as in Guindalera, while the number of transactions per year is 418 fewer.

Calle Rosario Acuña is the most expensive street in Salamanca, while Calle José María Sánchez Silva is the cheapest. Calle Campanar showed the greatest growth in price per square meter over five years.

Office Market

The office segment varies significantly by neighborhood: from the financial center on Paseo de la Castellana to areas with minimal office buildings, such as Fuente del Berro and Guindalera.

Recoletos and Castellana each have approximately 70 buildings and 430,000 m² of office space. The average rental rate reaches 26 euros/month per m², and in Recoletos buildings — up to 40 euros.

Occupancy “exceeds 90%, with the Goya area standing out,” notes Relinque.

Increase in Available Commercial Spaces

From December 2019 to December 2020, the share of vacant commercial premises grew from 12% to 19% due to COVID-19. Small retail stores were hit hardest, unable to sustain pre-pandemic rental rate levels.

Relinque noted: “Since the end of 2020, we have been recording a recovery in rental activity in commercial premises in this district.”

Hotel Sector Investments

High tourist demand combined with limited hotel supply has ensured strong investor interest in the district’s hotels.

Relinque summarized: “It is expected that throughout 2021, Salamanca will maintain its significance in the hotel investment market.”