retail-shopping-centers Market News: Spanish Real Estate Intelligence

Miu Miu Moves Into Store On C/Serrano 54

20 October 2017 - Eje Prime

Change of tenants on Madrid’s most luxurious street. The luxury firm Miu Miu, owned by the Prada group, is finalising the opening of a new establishment on Calle Serrano, a store that was occupied until now by the historical shoe shop Lurueña.

Prada will thus become the tenant of the Lurueña family, which owns the property. The establishment, measuring more than 250 m2 over two floors, is located at number 54 Calle Serrano. According to sources in the sector, the operation has been brokered by Cushman & Wakefield.

As well as the chain of shoe shops and the management of its premises (many of which it owns outright), the Lurueña family also operates another business line, franchising restaurants. Until 2006, Lurca, a company owned by the Lurueña family, was the second largest franchisee in Spain of the chain Burger King. One branch of the family is still linked to the restaurant sector as franchisees of the 100 Montaditos breweries and the pizza chain Papizza.

The family’s decision to generate returns from its premises by leasing them out instead of operating them commercially is not unique. In Barcelona, the owners of the also historical Mercería Santa Ana (haberdashery) have done the same thing in Portal de l’Àngel in Barcelona, the most expensive street in Spain for opening a store. The owners have moved their business to a neighbouring street and have leased the premises to Oysho, Inditex’s underwear chain.

Until now, Miu Miu operated in the Salamanca neighbourhood in a smaller store at number 72 Claudio Coello. Meanwhile, Prada has its flagship store on Calle Serrano, at number 25.

So far in 2017, the luxury thoroughfare in the capital has seen numerous changes of tenants. At the beginning of the year, the jewellery firm Carrera and Carrera launched a flagship store at number 27, measuring 150 m2.

In recent months, it has been joined on Calle Serrano by two other luxury firms: Salvatore Ferragamo, which took over from Lladró at number 68 and Kenzo, which chose number 17 to open its first establishment in Madrid.

Original story: Eje Prime (by I. P. Gestal and C. Pareja)

Translation: Carmel Drake

 
Bulevard Rosa Shopping Arcade To Be Converted Into Large Format Stores

20 October 2017 - Eje Prime

The historical Bulevard Rosa, managed by the Catalan Vives family, will close its doors during the first half of next year, according to explanations provided to Eje Prime by sources close to the process. The establishment, which will be converted into between large format stores for fashion retailers, is whereby following in the footsteps of the Madrilenian shopping arcade El Jardín de Serrano, which is also in the process of closing its doors for a refit to welcome Uniqlo’s first megastore in Madrid.

Bulevard Rosa opened its doors in December 1978, to become one of the most iconic shopping arcades in the centre of Barcelona. The complex, which occupies the ground floor of the office building located at number 55 Paseo de Gracia, currently comprises around 100 shops and has a gross leasable area of 5,200 m2.

According to sources at Bulevard Rosa, the managers of the shopping centre have already contacted the tenants to inform them that their rental contracts will not be renewed beyond June 2018. According to sources in the real estate business, the owners’ project involves transforming the arcade into between two and four megastores, depending on the needs of the operators that express interest in the location (…).

This decision comes ten years after the managers of Bulevard Rosa tried to revitalise the shopping centre by expanding it and introducing new operators. In 2008, the company converted its former movie theatres into a Nespresso megastore, whilst the Galician ladies’ fashion label Bimba y Lola also recently expanded its store in the complex.

With the disappearance of Bulevard Rosa, the owners of the complex may be able to generate a return on their commercial investment with the opening of new large format stores. Currently, the monthly rent for a store on Paseo de Gracia amounts to between €240/m2/month and €310/m2/month, with a return of 3.8%.

Moreover, fortune is playing into the hands of the owners of the shopping arcade, given that the availability of stores along this stretch of Paseo de Gracia is almost nil (…).

Original story: Eje Prime (by Custodio Pareja)

Translation: Carmel Drake

 
Flagship Stores Become The Bastion Of Large Retailers

19 October 2017 - Expansión

The unstoppable rise of e-commerce, the tsunami of digitalisation and the new buying habits of consumers have revolutionised the retail sector forcing operators to adapt to the new times to stay competitive.

The e-commerce sector is now turning over €24,000 million per annum in Spain, with a growth rate of 20% p.a. In this context, consumers are increasingly using the internet to manage their purchases, resolve queries and optimise their visits to stores. As such, they are visiting stores less frequently but they are spending more time there when they do go, according to a report from CBRE about the retail sector.

In this context, large international brands are backing the flagship store model as a gateway into Spain; and operators that have traditionally based themselves on the outskirts of cities are now moving into flagship stores in the centre. By way of example, the French firm Kiabi opened a store on Paseo de Gràcia a few months ago. In the same way, operators who have traditionally had stores in retail parks are now making space for themselves in the city centre, such as Media Markt, which opened two stores in the centre of Barcelona in 2016. Before the summer, the electronics firm also opened its new its flagship store in Plaza del Carmen, Madrid, just a stone’s throw from Gran Vía.

Ikea is joining this trend too, with a store on Calle Serrano; as is Leroy Merlin, which is planning to open a shop on Calle Fontanella, next to Plaza de Catalunya in Barcelona

Interest in Spain

“Physical stores are still the favourite channel for consumers, but it is harder to get people out of the house. To attract them, retailers are opening large flagship stores focused on the shopping experience and expanding the range of services, supported by new technologies that allow marketing strategies to be customised”, explains Gonzalo Senra, National Director of Retail at CBRE España (…).

Given the interest from large brands in Spain and encouraged by the upwards cycle of the economy and the improvement in consumption, many overseas institutional investors have decided to back the Spanish market. For example, the US investor Hines has purchased four important prime premises in Madrid and Barcelona in the last year.

These types of investors are the main buyers of flagship stores in well-located premises, involving investment volumes of more than €20 million. Moreover, sources at the consultancy firm have noted a change in the trend in this market with the entry of several insurance companies bidding for large prime assets.

By contrast, the market for smaller acquisitions is dominated by Spanish private investors and family offices – they tend to be particularly interested in assets worth less than €10 million.

Overall, investment in high street premises amounted to €800 million in 2016. The rate of investment continued during the first half of this year, with an investment volume of €515 million, according to data from the consultancy firm (…).

The high level of demand has accentuated the typical shortage of well-positioned products and resulted in a reduction in returns. According to the report, the downward trend in yields continued in 2017 to reach 3.25% in some cases for the most prime products in Madrid and Barcelona (…).

Original story: Expansión (by Rebeca Arroyo)

Translation: Carmel Drake