C&W: RE Inv’t In Retail Sector Exceeded €4,300M In 2016

2 February 2017 – Finanzas

Real estate investment in the retail sector – commercial assets – in Spain exceeded €4,300 million in 2016, up by 22% compared to the previous year, thanks to the completion of 45 operations, according to the Marketbeat Retail España report, compiled by the real estate consultancy firm Cushman & Wakefield.

The study indicates that much of this investment came from overseas investors, particularly in the case of shopping centres.

Nevertheless, overall, domestic capital increased to account for 67% of financing in 2016, compared to 8% in 2007, due to the rise of the Socimis.

The CEO of Cushman & Wakefield in Spain, Oriol Barrachina, said that retail is one of the “clearest” indications that the market has become globalised.

Moreover, Barrachina commented on the need to increase “transformation” and “diversification” to generate wealth “in other neighbourhoods”.

In relation to retail complexes, the report indicated that they covered a total surface area of 16.8 million m2 – 66% of the total “stock” – spread across 672 locations.

More specifically, shopping centres covered a surface area of more than 11 million m2, with the addition of 175,000 m2 in 2016.

Regarding this year, the Director of Retail Leasing at Cushman & Wakefield in Spain, Cristina Pérez, highlighted the “positive trend” expected in the sector, thanks to the construction of another 100,000 m2 of space, with two centres in Madrid (Sambil and Plaza Río 2) and another one in Barcelona (phase 2 of Glòries).

In terms of retail parks in Spain, the supply now exceeds the European average, with a total surface area of 2.8 million m2.

In terms of high street premises, the head of the area, Robert Travers, explained that it has reached “historical highs”, thanks to the improvement in the economy, growth in tourism and rising consumer confidence.

Moreover, Travers noted that the luxury sector is suffering from a “major” change, following “eight years of euphoria”, due to the effect if terrorism, concerns over the Asian markets and a rise in taxes in China.

In this sense, the Head of High Street confirmed that the growth in luxury stores in Spain is going to be “moderate”.

Cushman & Wakefield’s report also contains information about the boom in e-commerce – which has grown globally by30% since 2007 – and its effect on the real estate sector.

Pérez underlined that it is now necessary “to offer a different social experience” to get “people out of the house” and visiting shopping centres in person.

The Head of Retail Leasing acknowledged that 77% of Spain’s shopping centres “need some kind of improvement”, including modifications to bring them closer to the e-commerce segment.

Original story: Finanzas

Translation: Carmel Drake

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