AREUEA 2025 Panel Recap – Navigating Southern European Real Estate Markets: Capital, Sustainability, and Sectoral Shifts
IESE Business School, Barcelona · July 2025
From selective yield compression to data centers, infill logistics, and ESG-driven pricing—this panel unpacked how capital is moving across today’s most dynamic real estate themes.
Panel & Moderator
- Joaquín Castellví López – Partner & Head of Acquisitions, Stoneweg
- Cristian Oller Angusto – Country Director, Prologis Spain
- Moderator: Prof. Carles Vergara, IESE Business School
Table of Contents
- Macroeconomics & Selective Yield Compression
- Logistics: Infill Is King
- Hospitality: From Distress to Dominance
- The Rise of “Living” as a Strategy
- Data Centers: High Barriers, High Rewards
- Innovation in Action: Museums, Surf Parks & Multilevel Warehouses
- ESG & Regulation: From Theory to Pricing
- If You Had €500M Today…
- Final Thoughts
Macroeconomics & Selective Yield Compression
With financing costs up roughly 200 bps over the last two years, underwriting has grown more complex and bid–ask spreads of 30–40% have become common in value-add/opportunistic strategies.
Still, the panel anticipates limited yield compression (≈10 bps) in selected Southern European pockets. Paris and the French market, however, were characterized as showing lower conviction and slower activity.
“Deals are happening—but they take longer, and the discipline bar is higher.”
Logistics: Infill Is King
COVID accelerated e-commerce and crystallized the logistics fundamentals. Southern Europe is behind the UK in online penetration (Spain ~12% vs. UK ~33%), but growth to ~14.7% by 2030 is expected to generate substantial new space demand.
- Rule of thumb: +1% e-commerce penetration ⇒ ~1.4–1.9 million m² in additional logistics demand.
- Severe land scarcity in urban cores is pushing rents up and pushing developers toward multilevel or brownfield solutions.
- Policy imperative: faster zoning and proactive planning to avoid structurally undersupplied last-mile nodes.
Case in point: Prologis’ 6-floor urban logistics project at the Paris périphérique—targeting luxury tenants like LVMH—illustrates how vertical logistics is becoming a necessity in Europe’s most space-constrained capitals.
Hospitality: From Distress to Dominance
Stoneweg split COVID-era teams into defense (portfolio stabilization) and offense (counter-cyclical acquisitions). The fragmented, family-owned nature of Southern European hospitality created a rich pipeline of assets to reposition.
- Tourism has rebounded beyond 2019 levels in many markets.
- Underwriting now accounts for intensified capex, operator shifts, and more resilient business models.
“Owning a beachfront hotel in the Mediterranean is like owning prime Paseo de Gràcia office—you can’t replicate it.”
The Rise of “Living” as a Strategy
“Residential” has fractured into a diversified platform labeled “Living”: student housing, senior living, BTR, co-living, branded apartments, and flex models. Demand remains robust across Southern Europe, even as developers pull back.
“In 2015 it was ‘residence’. In 2025 it’s ‘living’—a platform, not a product.”
Data Centers: High Barriers, High Rewards
Prologis is selectively pursuing data center development where power and zoning are secured, focusing on hyperscale projects (50–550 MW) across Madrid, Milan, Dublin, and Cambridge—with a develop-to-sell posture rather than long-term ops.
- Major constraints: power availability, massive capex, and a narrower exit universe.
- Two archetypes: urban colocation vs. peripheral hyperscale.
Innovation in Action: Museums, Surf Parks & Multilevel Warehouses
The panel spotlighted projects that epitomize how modern real estate blends placemaking, branding, and diversified income stacks:
- Stoneweg (Barcelona): A private museum on Passeig de Gràcia—leveraging culture + F&B + retail.
- Stoneweg (Madrid): Europe’s largest surf park with Atlético de Madrid, supporting 150+ surfers/hour plus hospitality-led adjacencies.
- Prologis (Paris): A 6-storey last-mile logistics hub inside the périphérique, tailored to high-value tenants (e.g., luxury brands).
“Today’s real estate is not just space—it’s an experience, a platform, and often, a brand.”
ESG & Regulation: From Theory to Pricing
With the EU’s EPBD and broader climate targets, sustainability is fully priced into underwriting today—if not on the premium side, then certainly on the discount side.
- Most effective measures: electrification (HVAC, lighting), energy efficiency (kg CO₂ saved), and solar PV at scale.
- Spain leads in enabling “energy communities”—allowing solar generation to feed buildings within a 2 km radius.
- Certifications: BREEAM Outstanding, EPC A/B are fast becoming baseline expectations.
“We don’t see ESG premiums yet. But we definitely see discounts for non-compliance.”
If You Had €500M Today…
Moderator Carles Vergara challenged the panelists to allocate €500M in Southern Europe with a 5-year, risk-adjusted lens:
- Cristian Oller (Prologis): Infill logistics; selective data centers where power/zoning are locked.
- Joaquín Castellví (Stoneweg): Living platforms; hospitality with experiential edges; tech-adjacent infrastructure.
Final Thoughts
The panel underscored a sector in structural transition. The playbook is no longer “buy stable cash flow and wait.” It’s about platform creation, operational excellence, regulatory fluency, and design-led value creation.
As capital becomes more discerning and regulation more demanding, the winners will be those who marry macro-awareness with sector specialization and executional creativity.
#AREUEA2025
#IESE
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#Hospitality
#LivingSector
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#Barcelona
#Decarbonization
#Innovation.
