Madrid, the new Miami: everybody says so

In recent years, Madrid has become an increasingly popular destination for Latin American investors seeking refuge for their capital. The city has attracted Venezuelan, Mexican, Colombian and Peruvian entrepreneurs, who find in Madrid a combination of infrastructure, security and business facilities. The Salamanca neighborhood, the most expensive in the city, has become the point of reference for many of these Latin American investors.

This statement “Madrid, the new Miami” is also stimulated by the rise in real estate prices in Florida and by the phenomenon that happened in Miami several years ago, which is now repeating itself in Madrid with the massive arrival of Latin Americans with money, who unwittingly change the local market and produce a vertiginous increase in the economy.

Latin American investment in the Madrid region since 2008 amounts to 12,044 million euros. Madrid has become the gateway to Europe for many Latin American companies, being the second destination for Latin American investment in the world, after the United States. Spain, and Madrid in particular, concentrates around 70% of all foreign investment coming into the country.

The reasons behind Madrid’s growing attraction for Latin American investors are diverse. The city offers personal and legal security, political and economic stability, quality of life, gastronomic and cultural offerings, good weather and direct flight connections with Latin American and European cities. In addition, the ease of obtaining residency and the more affordable prices compared to destinations such as Miami, have contributed to Madrid’s increasing attractiveness.

The Salamanca neighborhood has undergone an impressive regeneration, but it has also suffered a process of gentrification and rising housing prices. The average price in the neighborhood has increased by 100% since 2013, reaching €12,000 per square meter. Some critics point out that the focus on attracting foreign investment may lead to neglecting the development of other neighborhoods in the city.

The arrival of Latin American investors in Madrid dates back to the early 2000s, when the first Venezuelan fortunes began to settle in the city. This generated a pull effect that has attracted Mexicans, Colombians and Peruvians with high purchasing power in recent years. In addition to businessmen, former presidents, executives and owners of successful companies have also settled in Madrid.

Real estate investment has been one of the main focuses of Latin American investors in Madrid. They have acquired homes in the Salamanca neighborhood and elsewhere in the city, rehabilitating them and increasing their value. It is estimated that they have developed more than 60 luxury apartment developments in Madrid, creating value in the intervened properties.

The real estate market in the Salamanca district has experienced a shortage of supply and a significant increase in prices. Despite this, Latin American investors continue to show interest in investing in the area. The devaluation of the euro against the dollar has made the purchase even more attractive to them, as they have greater purchasing power.

The presence of Latin American investors has been evident in the streets of Madrid. Exclusive restaurants, luxury stores and personalized services are some of the businesses that have emerged to meet the demands of these new residents. In addition, they have contributed to the generation of employment in sectors such as construction, catering and luxury services.

Investment by Latin American investors is not limited to real estate. They have also financed education and training projects, such as the creation of prestigious business schools. These institutions attract Latin American and European students, generating a positive impact on Madrid’s education sector and economy.

However, the growing presence of Latin American investors has also raised some concerns and challenges for the city. The focus on attracting foreign investment and the possible lack of attention to other sectors and neighborhoods in Madrid has been criticized. The impact on the real estate market and the gentrification of the Salamanca neighborhood, which has led to rising prices and the expulsion of low-income residents, has also been mentioned.

In summary, Madrid has become an attractive destination for Latin American investors looking for investment and refuge for their capital. The city offers political stability, security, infrastructure and quality of life, making it an attractive alternative to destinations such as Miami. Latin American investment has contributed to Madrid’s economic development.

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