Spanish Retail Market Overview
So far in 2022, the retail sector in Spain has increased in all major aspects: in terms of sales evolution, footfall, and investment activity (+25%, +15% and +25% vs. FY21 respectively), even surpassed pre-pandemic levels. In fact, the market is experiencing a significant rebound of investors focused in retail assets.
Regarding Shopping Centres assets, the period of reduced investment activity has come to an end in 2022, with several major deals already closed (i.e., Torrecardenas in Almeria with a GLA of 60,000 sq.m. and Finestrelles in Barcelona with a GLA of 40,000 sq.m.). Prime Shopping Centres Average Yield is set between 5.5% and 6.0% (+25 – +75 bps vs. January 2022) with current average occupancy rate of c.85% – 90%.
With regards Prime High Street yields, these are found within the 3.25% – 3.75% range, in the main commercial venues of Madrid and Barcelona (+25 – +75 bps vs January 2022) with prime rents standing at €180 – €210/sq.m./month (very stable during the last 12 months).
On the one hand, the sectors that are performing more positively are Sports, Health and Beauty, Fashion and Accessories,which are changing the online supply with new trends. On the other hand, the hostelry sector is practically recovered from pre-pandemic sales levels, with a very strong performance during the last 12 months.
Finally, the macroeconomic environment is creating new opportunities for the entire retail sector and is forcing all players to develop new concepts that allow them to adapt to new consumer needs. For instance, tenants are showing a greater interest in assets with sustainable certifications. Meanwhile, developers are eager to reposition assets by mixing leisure with alternative uses, and finally, consumers are increasingly demanding retail spaces reserved for exclusive and unique experiences.