Spanish Retail Market Overview Q1 2023
Despite the slowdown in investment activity due to the undergoing volatility in the financial markets and the spike in interest rates, the retail sector in Spain continues to stabilize and is steadily recovering to pre-pandemic levels. The sector received a total investment of c. €200 million during the first three months of 2023.
The currently uncertain macroeconomic panorama has impacted prime yields in the High Street which have risen to 3.75% in Q1 2023. In the strongest commercial street locations, availability rates continue to fall, with Madrid and Barcelona registering vacancy rates of 3.5% and 5.2% respectively. Prime rents in the High Street remain stable compared to Q4 2022, where Barcelona slightly outperformed Madrid, with values at €240 vs €245/sq.m./month.
As in the High Street, shopping centers are also continuing their recovery process. In the first quarter of 2023, more than €75 million were transacted in Spain, highlighting their leadership in terms of investment volume among all retail segments. Yields have also risen compared to the previous period, closing at 5.75%. Prime rents remain stable at c. €70/sq.m./month.
Last but not least, retail parks are one of the segments which have grown the most compared to the previous year, securing an investment volume of c. €45 million. As in other key retail segments, yields increased to 5.6%, as prime rents stood at c.€18/sq.m./month.