BLOG #8: Madrid Calling
— Why Europe's Capital is Rising Fast
There's something happening in Madrid.
Not the flamenco-and-tapas version tourists know — but something that matters if you're in the business of capital, real assets, and long-term value creation.
Madrid has quietly risen from eighth to second place among Europe's most attractive cities for real estate investment, leapfrogging Paris. According to PwC's Emerging Trends in Real Estate Europe 2026, Madrid now trails only London — and by some measures, it's closing the gap.
The Numbers
Spain grew 3.2% in 2024, outpacing the Eurozone. Madrid accounts for nearly 20% of the country's GDP. Residential prices rose over 12% year-on-year in 2025, with rental yields ranging from 3.5% to 6%+ depending on district.
But it's not just residential. Madrid commands roughly 33% of all real estate investment in Spain, with strong activity across offices, logistics, living assets, and alternatives. This is now a diversified, institutional-grade market.
Madrid Nuevo Norte
If you want to understand Madrid's ambition, look north. Madrid Nuevo Norte is one of Europe's largest urban regeneration projects: 5.6km of underused railway land becoming a new CBD with 1.5 million sqm of office space, 10,000+ homes, and a 145,000m² urban park. After 28 years of planning, it's finally in execution — with €5.7 billion of private capital committed.
For us, projects like this represent exactly the kind of development capital opportunity we focus on across Europe.
Why We're There
In January 2026, we opened our Madrid partnership office with Lake Capital.
"The market has fundamentally changed since 2020. Today my work is behind the scenes: finding solutions for structures that need fresh capital. That's the gap we're filling together."
— Sheelam Chadha, Founder, Dry Capital
"Lake Capital excels at sourcing and managing assets; we don't do equity or debt solutions. Dry Capital does. Iberian asset owners now have a complete solution."
— María Laguna, Founder, Lake Capital
María brings 25+ years across DeA Capital, PATRIZIA, and IVG. Together, we're connecting Iberian real assets with European and Latin American institutional capital — with a special focus on development capital throughout Europe.
The Takeaway
Europe's capital map is shifting. Madrid has earned its place at the table. If you want to talk about what's happening there — or anywhere across our Continental European footprint — you know where to find us.
See you in Cannes!
Dry x Lake launch party, Madrid,
28 January, 2026
