The Rise of Commercial Investment in Spain in 2024
Spain has witnessed a remarkable surge in commercial investment. This growth is not only the responsibility of local investors but also of international funds that see the Spanish market as a good opportunity. Besides the attractiveness of our country for the international market, several factors explain why commercial investment in Spain is becoming an increasingly interesting option.
The retail sector is showing positive results. According to Savills, sales grew by 9.6% in 2023, while footfall increased by 7.4%. Outlets, medium-sized retail parks, and shopping centers lead in visits; sports, health and beauty, and home equipment top sales. Between January and May 2024, the consultancy forecasts a 3.9% expansion in sales and a 3.4% increase in footfall.
Key Factors in the Rise of Commercial Investment in Spain
Economic Recovery and Stability
The Spanish economy is showing an increasingly stable scenario. This situation has fostered a favorable environment for investment in general in our country, particularly in the commercial sector. Both national and international investors have identified Spain as a market with high growth potential, where commercial assets offer attractive profitability opportunities.
Increase in Tourism and Consumption
Spain continues to be one of the most visited tourist destinations in the world. In 2024, the country is expected to receive 83.7 million international visitors, surpassing the previous record of 83.5 million in 2019. Undoubtedly, this will be one of the drivers of national GDP growth this year, which, according to the International Monetary Fund (IMF), will be 2.4% for this year.
In this context, cities such as Madrid, Barcelona, Valencia, and the main coastal areas have seen an increase in investment in commercial premises and shopping centers driven by increased consumption.
Diversification of Real Estate Portfolio
As a diversification strategy, the commercial sector has become a key tactic. When investing in real estate, it is also favorable to capitalize on commercial assets to ensure a balance between risk and return.
Similarly, compared to the greater volatility of the residential sector, commercial premises show less dependence on rental regulations and greater stability in income flows.
Opportunities in the Commercial Market
Premises in Prime Areas
Prime locations, such as the main shopping streets of Madrid and Barcelona and other major cities in Spain, are undoubtedly the most in demand, due to the constant influx of consumers and the preference of major brands for these locations.
Among the most in-demand streets year after year are Preciados Street and Serrano Street in Madrid; Portal de l’Àngel, and Passeig de Gràcia in Barcelona, with the most expensive premises in the country due to the influx of both tourists and residents.
Other highly valued streets for the commercial sector in Spain include Colón Street in Valencia, Gran Vía in Bilbao, Marqués de Larios Street in Málaga, and Tetuán Street in Seville.
Shopping Centers and Retail Parks
Shopping centers, which took a hit during the pandemic, have shown surprising resilience. The combination of retail and entertainment remains attractive, so much so that they have recorded record figures in the past year and increasing levels of investment.
As a sign of their solid recovery, during the first quarter of the year, the average occupancy rate of premises in shopping centers and retail parks reached 94.4%, the highest since 2018. And in terms of sales, they exceed 2019 levels by 19.4%. Pre-pandemic levels have not yet been achieved; however, the first quarter of this year saw a 2.8% increase, getting very close.
Future Prospects
The rise of commercial investment in Spain appears to be on an upward trajectory. The positive trend is expected to continue, driven by economic stability, international attractiveness, and the ongoing evolution of the retail and logistics sectors.
With these favorable prospects, Spain is emerging as one of the most promising alternatives in Europe, offering solid returns and development opportunities in a stable and constantly evolving economic environment.