Madrid has climbed to second place in the rankings of Europe’s most attractive cities for investment in 2025, according to a report by Pc. The Spanish capital has made significant progress since 2020, rising from eighth place. Meanwhile, Barcelona has fallen to 11th, slipping out of the top 10.
Madrid’s rise in the rankings
The Pc report is based on 1,143 interviews with real estate agents, institutional investors, funds, and financial institutions. Their assessment places Madrid just behind London, which holds the top spot. Other cities in the top 10 include Paris, Berlin, Munich, Amsterdam, Milan, Frankfurt, Hamburg, and Lisbon. Notably, other than Madrid and Barcelona, no other Spanish city appears in the top 30.
Key factors behind Madrid’s success
The report highlights Madrid’s strong macro- and microeconomic performance as a major draw for investors. The city is perceived as a dynamic and well-developed market with significant opportunities. Investors also praise its high quality of life and robust economic evolution.
“Madrid’s rise to second position marks its best ranking ever,” the report states. This improvement is attributed to favourable governance and strategic leadership, with significant changes in local and regional politics since 2019.
Political impact on investment appeal
Madrid’s appeal among international investors has grown since José Luis Martínez-Almeida became mayor and Isabel Díaz Ayuso assumed leadership of the Community of Madrid. Their tenure is credited with fostering an investor-friendly environment.
Conversely, Barcelona’s position has declined, partly due to local governance challenges. The influence of pro-independence movements and political instability has deterred foreign investors, according to the report.
Criteria for attractiveness
The rankings evaluate cities based on several factors, including:
- Economic development and market size
- Liquidity and opportunities for new development
- Quality of transport infrastructure, such as airports and trains
- Overall quality of life
Madrid excels across these metrics, reinforcing its status as a premier investment destination.
Investor priorities for 2025
The report identifies key sectors that are driving investor interest. Data centres top the list, reflecting the growing demand for digital infrastructure. Madrid’s capacity for data centres is set to increase by 54% by 2024, according to a separate analysis by Savills. The city’s energy capacity and physical space make it an ideal hub for this sector.
Other priority sectors include energy infrastructure, student housing, and logistics, all of which are gaining traction among investors looking to capitalise on Madrid’s growth potential.
Madrid’s ascent to second place underscores its growing importance as a European investment hub. With strong economic fundamentals, strategic leadership, and a focus on key sectors like data centres and energy, the Spanish capital is well-positioned to attract significant investment in the coming years.
Also read: Top reasons why Madrid is the best city for expats and remote workers