Flex Living, a rapidly growing segment of the Spanish real estate market, is revolutionizing the way people approach housing. This innovative concept combines flexibility, community, and service-oriented living to meet the evolving needs of modern residents. Let’s explore the rise of Flex Living in Spain, its impact on the real estate landscape, and the key drivers behind its growth.
Understanding Flex Living
Flex Living encompasses a range of temporary housing solutions that are professionally managed and include various services. This concept caters to a growing demand for flexible, community-oriented living spaces that traditional housing options have struggled to provide.
Key Features of Flex Living
- Flexibility: Short-term contracts and adaptable living spaces
- Professional Management: Dedicated teams overseeing property maintenance and services
- Included Services: Utilities, cleaning, and amenities often bundled into the rental price
- Community Focus: Shared spaces and events to foster social connections
Growth and Market Potential
The Flex Living sector in Spain has experienced remarkable growth in recent years. Since 2020, the number of Flex Living beds has quadrupled from 2,000 to around 8,000. This rapid expansion is expected to continue, with projections indicating that the stock will nearly double to 20,000 beds by 2025.
Current Market Distribution
- 75% of operational beds are located in Madrid and Barcelona
- Other key areas include Valencia, Malaga, and Vizcaya
Investment and Market Consolidation
The Flex Living market in Spain has attracted significant investment, reflecting its growing importance in the real estate sector.
- €666 million invested in 2022
- €240 million invested in the first half of 2023, making it the second-largest segment within the Living sector
This surge in investment indicates that Flex Living is transitioning from an emerging trend to a consolidated asset class within the Spanish real estate market.
Main Drivers Behind the Rapid Growth of Flex Living in Spain
Several key factors are driving the rapid growth of Flex Living in Spain:
- Demographic Shifts: There is a growing number of single-person households in Spain. Projections indicate that by 2037, there will be 6.5 million single-person households, making it the fastest-growing housing typology in the country.
- Housing Market Challenges: Many Spaniards, especially younger generations, face difficulties accessing traditional home ownership and dealing with rising rental prices in urban centers.
- Changing Lifestyles: There’s an increased demand for flexibility among professionals, digital nomads, and remote workers who value mobility and adaptable living arrangements.
- Urban Population Growth: The concentration of people in major cities has created a need for innovative housing solutions to address supply shortages.
- Investment Interest: The sector has attracted significant investment, with over €560 million invested since 2019, including €140 million in 2023 alone. This influx of capital is fueling rapid expansion.
- Market Potential: Spain is positioned to become the third European country with the most Flex Living beds by 2026, indicating strong growth prospects.
- High Occupancy Rates: The average occupancy rate for Flex Living properties is very high at 94%, demonstrating strong demand for this housing model.
- Service-Oriented Approach: Flex Living offers a wide range of included services and a community-oriented living experience, which appeals to many tenants.
- Sustainability Focus: 62% of operators consider ESG (Environmental, Social, and Governance) factors a priority, aligning with growing consumer preferences for sustainable living options.
- Technological Integration: The emphasis on digitalization and smart home features in Flex Living properties caters to tech-savvy residents.
- Economic Factors: Spain’s business-friendly environment, especially in major cities, attracts startups, remote workers, and digital nomads who prefer flexible living arrangements.
Types of Flex Living
The Flex Living sector encompasses various housing solutions tailored to different needs:
Corporate Living
This segment caters primarily to professionals, including digital nomads, freelancers, and corporate employees. It represents a significant portion of the demand, with over 80% of occupants falling into these categories.
Coliving
Coliving spaces focus on creating community-oriented living environments, often featuring shared common areas and organized social events.
Student Housing
While not exclusively part of Flex Living, many student housing developments are incorporating flexible elements to cater to international students and short-term programs.
Digital Nomads and Flex Living
Digital nomads, professionals who work remotely while traveling, are increasingly drawn to Flex Living options in Spain. This trend has been further accelerated by Spain’s introduction of the Digital Nomad visa, which makes the country an even more attractive destination for remote workers.
Key Attractions for Digital Nomads
- Flexibility: Flex Living accommodations offer short-term contracts that align with the nomadic lifestyle.
- Fully Equipped Spaces: These properties typically come with high-speed internet and workspaces, essential for remote work.
- Community Aspect: Many Flex Living options provide opportunities for networking and socializing, which is valuable for nomads seeking connections.
- Affordability: Compared to hotels or short-term rentals, Flex Living can be more cost-effective for extended stays.
- Variety of Locations: Digital nomads can find Flex Living options in major Spanish cities like Madrid, Barcelona, and Valencia, allowing them to experience different parts of the country.
Digital nomads can find Flex Living options in major Spanish cities
Major Markets in Spain
Madrid
- Over 6,000 beds currently in stock
- Nearly 16,000 beds in the pipeline
- Most current supply located within the M-30
- Future developments planned for the outskirts, with larger capacities (150+ beds) and extensive amenities
Barcelona
- More than 2,200 beds in stock
- Approximately 2,600 new beds in development
Valencia
- 1,100 beds in stock
- Over 880 beds in the pipeline
Other Notable Markets
- Guipúzcoa: 646 existing beds, 693 planned
- Málaga: 451 developed beds, 636 in the pipeline
- Vizcaya: 176 active flex beds, 730 planned
Operational Metrics
Understanding the operational aspects of Flex Living properties provides insight into their performance and appeal:
- Average occupancy rate: 94%
- Average monthly rates:
- Madrid: €922
- Barcelona: €967
- Typical price ranges:
- Madrid: €600-1,500/month
- Barcelona: €700-1,500/month
- Average contract duration: 6-9 months, followed by 3-6 months
Key Factors Driving Tenant Preferences
Flex Living operators have identified several aspects that tenants value most:
- Contractual and temporal flexibility
- Wide range of included services
- Community-oriented approach
- Sustainability and ESG considerations
- Digitalization and technology integration
Future Outlook
The future of Flex Living in Spain looks promising, with several trends shaping its trajectory:
- European Expansion: The European market is expected to grow from 36% to 57% of total global Flex Living beds.
- Continued Investment: The sector is likely to see increased investment as it matures and demonstrates stable cash flows.
- Sustainability Focus: ESG considerations will play an increasingly important role in development and operations.
- Technological Integration: Smart home features and digital services will become more prevalent.
- Market Consolidation: As the sector matures, we may see mergers and acquisitions among operators.
In conclusion, Flex Living represents a significant shift in the Spanish real estate market, offering innovative solutions to changing housing needs. With strong growth projections, increasing investment, and evolving consumer preferences, Flex Living is poised to become a cornerstone of urban housing in Spain’s major cities and beyond. The sector’s ability to cater to diverse demographics, including the growing population of digital nomads, further cements its position as a key player in the future of Spanish real estate.
