Overview of the Spanish Retail Market 2020
The Spanish Retail real estate sector in 2020 has been severely affected by Covid-19 (mainly due to mobility and travel restrictions), leading to an expansion in yields (from 25 b.p to 100 b.p, depending on asset class and location) and vacancy rates (+c.4% vs. 2019). Prime rents have decreased in all sectors, being High Street the most affected (-16% vs. 2019).
Spanish 2020 retail investment volume experienced a c.32% increase vs. 2019 amounting to €2,300 million. This significant growth is only attributable to two large shopping centres transactions registered in Q1 2020 (Puerto Venecia & Intu Asturias). Investments in High Street Retail has been severely affected in 2020, experiencing c.60% drop vs. 2019 (c.€380 million). On the other hand, supermarkets have been one of the most sought-after assets due to their resilience and long-term leases, accounting for c.24% of total investments (c.€550 million), with two large portfolio transactions registered in Q2 and Q4 2020 (the acquisition by LCN Capital Partners of 27 Mercadona Supermarkets & the purchase by Sagax of 37 GM’s ‘Cash and Carry’ respectively).