Inv’t In Commercial Assets Doubles To €920M In 2015

11 December 2015 – Expansión

From €32 million to €920 million in just five years. Those are the figures from the market for investment in commercial premises in Spain. According to the consultancy firm JLL, so far this year, investors and family offices, for the most part, have invested €920 million purchasing commercial premises, almost double the figure recorded in 2014, when they spent €452 million on these types of assets and 29 times the figure recorded in 2010, when investment in this segment amounted to just €32 million.

The almost €1,000 million invested this year has involved the purchase of around 400 properties, including the acquisition of the commercial building Gran Vía 32, which now houses the Irish textile group, Primark’s, largest store in Spain. For this building, Pontegadea, the investment arm of Amancio Ortega, paid €400 million. Another key purchase featured Sfera’s premises on Calle Preciados, 4 (Madrid), for which the fund IVG Inmobilien AG paid €70 million.

The purchase of high street premises has accounted for 23% of all real estate investment in commercial assets (including shopping centres) say the experts at JLL. “If 2014 was characterised by the recovery of the commercial investment market, then 2015 has really consolidated that trend, with total investment of €2,669 million during the first nine months of the year, up by 46% compared with the previous year. We expect that 2015 will finish with a figure of almost €3,000 million”, explain the experts at JLL in their report. By nationality, Spaniards account for 40% of commercial investments (including the purchase of shopping centres), due to the significant investments made by the Socimis.

The intense competition for the purchase of commercial premises has forced many investors to start analysing operations beyond the main shopping streets in Madrid and Barcelona, according to the experts at the consultancy firm. “Although Madrid and Barcelona continue to be the main point of entry for international firms, the low yields (which now amount to around 4%), have caused many investors to show interest in other locations, where investment returns are higher”, they explain. One example of this, is the German fund Patrizia’s first foray into Spain, which acquired a commercial establishment in Málaga leased to H&M.

Rental prices

In the case of rental prices, the market for commercial premises is also showing strong results. Portal de L’Àngel in Barcelona is still the most expensive shopping street in Spain, with an average rent of €250/m2/month, followed by Preciados in Madrid, where rents have increased by more than 6% with respect to the same quarter in 2014, to reach €245/m2/month. “Moreover, the current availability rate is very low in areas such as the Puerta del Sol and Preciados, which are now at full occupancy again”, says JLL.

Following the grand opening of Primark in 2015, we can expect to see the inauguration of Adidas, Tous and Parfois on Madrid’s Gran Vía next year, as well as Céline and Massimo Dutti on the Paseo de Gracia in Barcelona. Moreover, the Japanese fashion house Uniqlo is going to open its first store in Spain, also on the Paseo de Gracia, at number 11, in premises measuring almost 5,000 m2.

Original story: Expansión (by R. R.)

Translation: Carmel Drake