The pandemic, with the massive closure of stores, and the rise of online commerce in the last decade tested the physical store model and, with it, the stability of commercial real estate assets. Beyond the most critical moments, these properties continue to demonstrate their strength in terms of profitability.
Supported by strong demand and a good level of occupancy, prime retail spaces attract the attention of many investors who welcome having renowned brands and high rents among their tenants. In this regard, Barcelona and Madrid can boast of having two of the most exclusive shopping streets in the world:
- Paseo de Gracia: Among the shops on the iconic Barcelona street are luxury brands such as Loewe, Versace, Prada, or Dior, with average rents of 3,000 euros per square meter per year. A price that continues to rise, as it has increased by 9% compared to the previous year. According to the global report “Main Streets Across the World” by real estate consultancy Cushman & Wakefield, this makes Paseo de Gracia the commercial axis with the highest rental prices in Spain. The report analyzes the rents of luxury shopping streets in 92 cities worldwide and places Paseo de Gracia in 11th place in the global ranking, rising seven positions.
- Calle Serrano: The second commercial street with the highest rents nationwide is Calle Serrano in Madrid, with rents of 2,940 euros per square meter per year, also an increase of 9% compared to 2022. The Madrid street ranks 33rd in the European ranking. The presence of major luxury brands has favored the recovery of the maximum rents on this shopping street and demand at pre-pandemic levels, according to data from Cushman & Wakefield.
Close behind are Avenida Portal de l’Àngel in Barcelona – which ranked first in 2019 – and Madrid’s Preciados and Gran Vía streets, each with rents of 2,880 euros per square meter per year.
Beyond Madrid and Barcelona, the report also includes Calle Marqués de Larios in Malaga (seventh place with 2,160 euros per square meter per year); Calle Colón in Valencia (ninth place; 1,500 euros per square meter per year), and Gran Vía in Bilbao (eleventh place; 1,440 euros per square meter per year) among the most exclusive. They are followed by Tetuán in Seville (twelfth place with 1,440 euros per square meter per year), Jaime III in Mallorca (fourteenth place; 1,140 euros per square meter per year), and Plaza de la Independencia in Zaragoza (fifteenth place; 1,020 euros per square meter per year).
Globally, Fifth Avenue in New York, with 21,076 euros per square meter per year, consolidates its position as the most expensive shopping street in the world. Tsim Sha Street in Hong Kong (15,134 euros per square meter per year) ranks second, followed by Via Montenapoleone in Milan (14,547 euros per square meter per year); New Bond in London (14,346 euros per square meter per year), and Champs Elysées in Paris (11,069 euros per square meter per year).
As for prices, rents have experienced moderate increases compared to the previous year. However, according to Cushman & Wakefield, there are some significant differences, such as the 9% increase in the main commercial streets in Spain compared to declines of 14%, as recorded in Finland.
The most profitable commercial spaces
In addition, according to data from the Idealista portal, commercial premises are the most profitable product in almost all capitals. In this regard, the highest return is obtained in Ávila (12.3%) and Murcia (11.7%). They are followed by premises located in Lleida, Zaragoza, and Girona, with a 10.5% return in all three cases. Huelva (10.4%), Santa Cruz de Tenerife (10.4%), Bilbao (10.3%), and Ciudad Real (10.1%) are above 10%. Barcelona and Madrid record returns of 8.4% and 8.2%, respectively. Palma, with a yield of 7.1%; Teruel (7.2%); Cuenca (7.3%); Salamanca and A Coruña (7.6% in both cases) are the cities with the lowest returns.
Investing in commercial spaces through crowdfunding
There are many reasons why investing in commercial spaces might be interesting. And now, thanks to crowdfunding, investment in commercial assets is accessible to everyone: large and small investors. For a year now, Urbanitae’s new rental line has offered investors the opportunity to invest in low-risk assets. The Local Prime project is one of the latest investment operations we have launched, involving the acquisition of a commercial space in Madrid rented to a luxury brand – Chanel – in the heart of Madrid’s Golden Mile.
