Gesvalt: Rental Prices Rise In Spain’s Prime Retail Spaces
31 March 2017 – Eje Prime
Rental prices in the retail market continued to rise in 2016. Rental prices on the prime high streets of the main urban areas in the country experienced a change in trend after an increase in their prices. High streets such as Portal de l’Àngel in Barcelona and Gran Vía in Madrid now have monthly rental costs of €270/m2 and €230/m2, respectively, according to the Market Study of Commercial premises, prepared by the valuation specialist Gesvalt.
Although the retail sector still represents a very attractive market, its volume decreased with respect to 2015, primarily due to the boom in the Socimis, which last year focused their attention on actively managing their portfolios, rather that making new investments like the year before.
In the Catalan capital, streets such as Paseo de Gracia, Rambla Cataluña and Avenida Diagonal saw prices stabilise at their 2015 levels. In Madrid, rental prices rose slightly with respect to 2015, with Calle Preciados once again the high street that recorded the most expensive prices in the capital, with rents of €255/m2/month. In Madrid, the significant increase in rents on Gran Vía saw prices rise from €205/m2/month to €230/m2/month last year.
In Valencia, rents in the prime areas rose by between 5% and 10%, and Calle Colón was the city’s most expensive street, with rents of up to €160/m2/month on its most exclusive stretches. In the city of Palma, prices remained stable with respect to the previous year on the city’s three prime streets.
“Meanwhile, it is worth noting the low and almost zero availability of large and flagship stores in all of the prime areas, due to the significant demand for that kind of property from the large brands”, said the study.
Sandra Daza, Director General at Gesvalt, said that, based on the results obtained, it is clear that “commercial premises are still the most profitable assets in Spain”. And she added that “buying a commercial property in a prime area in Spain and then leasing it out would currently generate a gross return of between 4.5% and 6%.
Original story: Eje Prime
Translation: Carmel Drake