The Iberian succession: how a new generation is rewriting Spain and Portugal's institutional playbook

A peninsula graduating from opportunistic to core

For much of the past decade, institutional investors treated the Iberian Peninsula as a tactical allocation, a market to enter when spreads widened and exit when yields compressed. That characterisation is losing its accuracy. Spain's real estate investment volume closed 2025 exceeding €18.45 billion, a 31% increase compared to 2024 and the highest level since 2018, according to CBRE. The consultancy forecasts further growth of between 5% and 10% in 2026, projecting a total volume between €19 billion and €21 billion. Prime residential capital values in Madrid and Lisbon are expected to see growth above 4% in 2026, placing both cities among the top five global markets for appreciation, according to Savills.

These are not the numbers of an opportunistic sideshow. They reflect a structural repricing of Iberian risk, driven by demographic resilience, regulatory modernisation, and, critically, a generational shift in the leaders who mediate between international capital and local markets. Understanding who these leaders are, and how their approach differs from the previous cycle's dealmakers, has become essential for any cross-border allocator with European exposure.

Who are the leaders defining Iberia's next institutional cycle?

The traditional narrative of Iberian real estate leadership centred on domestic developers with deep political networks and a preference for bilateral transactions. The cohort now shaping capital flows into the peninsula operates with a fundamentally different logic: cross-border by formation, institutional in governance standards, and fluent in the regulatory languages of multiple jurisdictions.

Fernando Martínez Zurita, founder of Mazza Capital, exemplifies this profile. Operating primarily in Mexico, where he has mobilised projected funds exceeding $200 million in private capital for infrastructure and real estate according to GRI Institute data, Martínez Zurita represents a class of Latin American and international capital allocators who view Iberia through a dual lens. Spain functions both as a direct investment destination and as a structuring gateway into broader European markets. For investors in this category, Madrid and Lisbon offer legal frameworks familiar enough to Latin American capital, combined with EU-standard governance protections that reduce perceived risk.

Pedro Baganha occupies a different but complementary position. As Porto's City Councillor for Urbanism, Public Space and Housing, Baganha has announced a target to increase public housing supply in Porto from 2% to 10% over the next six years, as reported by Iberian Property and GRI Institute. This ambition signals a policy posture that institutional investors are watching closely. Municipal leaders who set explicit, measurable housing targets create the kind of pipeline visibility that long-duration capital requires. Baganha's approach reframes the relationship between public policy and private investment: rather than viewing regulation as an obstacle, it becomes a structuring mechanism that institutional allocators can underwrite.

Marco Zarges, chairman of ZAR Real Estate Holding, brings a pan-European perspective. With a direct investment volume of approximately €10 billion across Europe according to GRI Institute, Zarges represents the German institutional tradition of disciplined, long-horizon allocation. His engagement with Southern European markets reflects a broader trend among Northern European investors who are increasing Iberian weightings as yield differentials narrow in core markets like Germany and the Netherlands.

Sonia da Silva, active with Bouygues Immobilier in the French market, adds another dimension to this cross-border ecosystem. French developers and investors have historically maintained strong capital links with Portugal and, increasingly, with Spain's living sector. The living sector led real estate investment in Spain in 2025, capturing 29% of the total investment volume according to CBRE, a dominance that aligns precisely with the residential and mixed-use expertise that operators like Bouygues Immobilier bring to cross-border partnerships.

The strategic significance of this cohort lies in its diversity of origin and unity of approach. These leaders share a commitment to institutional-grade governance, ESG integration, and transparent structuring that previous generations of Iberian dealmakers did not prioritise with the same rigour.

How is regulation reshaping the competitive landscape for cross-border capital?

No analysis of Iberian institutional real estate can ignore the regulatory transformation underway in both countries. Spain's Ley 12/2023, the Right to Housing Law, caps annual rent increases, allows regions to declare stressed market areas for stricter rent controls, and mandates 30% affordable units in new developments. The law is fully enacted and implemented as of 2026. In Portugal, Law 56/2023, the Mais Habitação programme, eliminated real estate investments as an eligible route for the Golden Visa programme to curb residential property price inflation. This legislation, enacted in October 2023, has been actively enforced throughout 2025 and 2026.

These regulatory interventions alter the competitive dynamics of cross-border investment in several ways. First, they raise the governance bar. Operators accustomed to light-touch regulatory environments face compliance costs and structuring complexity that favour experienced institutional players over smaller opportunistic entrants. Second, they create policy-driven demand signals. Spain's affordable housing mandate generates a pipeline of development opportunities that align with the impact and ESG mandates of pension funds, insurance companies, and sovereign wealth funds. Third, they shift the nature of returns. Rent caps compress income yields on stabilised assets but increase the premium for development expertise and long-duration capital, precisely the competencies that leaders like Zarges and Martínez Zurita represent.

Baganha's housing targets in Porto illustrate how municipal policy and national legislation interact. A city councillor committing to a fivefold increase in public housing supply creates a framework that institutional investors can model against. When combined with Portugal's national restrictions on speculative residential investment through the Golden Visa reform, the overall policy architecture channels capital toward productive housing supply rather than asset-price speculation. This is the kind of institutional clarity that cross-border allocators increasingly demand.

What does Iberia's generational shift mean for European portfolio construction?

Savills projects that European real estate investment volumes will rise by around 18% in 2026, with living sectors expected to remain a dominant allocation for institutional capital. Within this continental picture, the Iberian Peninsula occupies an increasingly distinctive position.

The generational shift underway carries three implications for portfolio construction. First, Iberia is moving from satellite to strategic allocation. The combination of demographic growth, regulatory modernisation, and institutional leadership quality means that Spain and Portugal merit dedicated allocation strategies rather than residual weighting within a pan-European fund. The scale of capital now entering the market, exceeding €18 billion in Spain alone in 2025, supports the liquidity depth required for institutional mandates.

Second, the cross-border nature of the new leadership cohort reduces information asymmetry. When German, French, Latin American, and domestic Iberian leaders operate within the same governance frameworks and participate in the same forums, the opacity that historically discouraged foreign capital diminishes. GRI Institute's European events and research programmes have served as a convening platform for precisely this type of cross-border dialogue, connecting institutional investors with policymakers and operators across the peninsula.

Third, the regulatory environment, while more complex, is also more predictable. Enacted legislation like Ley 12/2023 and Law 56/2023 provides a stable framework for underwriting. Institutional investors can model compliance costs, affordable housing mandates, and rent trajectories with greater confidence than in markets where regulatory change remains speculative.

The Iberian succession is, at its core, a story of professionalisation. A new generation of leaders, operating across borders and embedded in institutional networks, is transforming the peninsula's real estate market from a high-beta European play into a core allocation supported by governance, policy clarity, and demographic fundamentals. The investors who recognise this shift early will capture structural advantages that compound over the next cycle.

For allocators and operators seeking to deepen their Iberian strategies, GRI Institute's upcoming España GRI 2026 event offers a platform to engage directly with the leaders shaping this transition. The institute's ongoing research into Southern European capital flows and cross-border structuring provides the analytical foundation that this market moment demands.

The peninsula is no longer waiting for its turn. It is setting the terms.