Idealista: Garage Rental Yields Averaged 5.6% In Q1 2016

13 June 2016 – Expansión

Investment / Buying a parking space for rent generates an annual gross yield of 5.6% in Spain. That figure is even higher in the most sought-after neighbourhoods of the large cities, where it reaches up to 8%.

Now that debt and deposits are offering such meagre returns and the stock exchange is trading well below the levels seen a year ago, alternative investments are gaining strength. That is the case with housing, and also with garages. In this sense, the central areas of Madrid and Barcelona are full of very attractive opportunities to buy parking spaces and rent them out, with yields of more than 6% gross per annum.

The average return on garages in Spain is 5.6%, according to a study from Idealista, compiled using data from Q1 2016. That is, no less than 1.1 percentage points higher than the figure a year ago (4.5%) and four times the yield on 10-year government bonds (1.4%).

The highest average returns are obtained in Murcia (5.7%), followed by Málaga (5.5%), Almería (5.4%) and Castellón (5.1%). Parking spaces in Pamplona (4.6%) and Guadalajara (4.5%) also perform well. At the opposite end of the spectrum, the (regional) capital cities with the least profitable garages are Barcelona, with 2.1%, Oviedo (2.3%) and Salamanca (2.6%). In Madrid, the return is 2.8%.

But the arithmetic means are not representative in the two largest cities, as the markets there are very heterogeneous. In peripheral areas, there is hardly any demand for garages and there they generate minimal returns, whilst in prime areas of Madrid and Barcelona, parking spaces generate yields of more than 6%. (…).

Original story: Expansión (by Juanma Lamet and Rebeca Arroyo)

Translation: Carmel Drake