Offices and retail spaces: the most profitable real estate assets
Real estate has traditionally been one of the most solid and secure investments. Purchasing an asset for later rental typically offers higher returns than other types of products. Buying a property to rent out is the most common option, but it’s not the only interesting alternative when investing in real estate. Other properties offer similar or even higher returns. This is the case with offices and retail spaces, which stand out as the most profitable assets according to data from Idealista for the second quarter of 2024.
This analysis, which relates the sales and rental prices of different real estate products to calculate their gross profitability, determines that offices yield a return of 11.9%. Meanwhile, retail spaces offer a return of 9.7%, and residential properties, at 7.5%, rank third among the most profitable assets. Finally, garages are positioned with a 6.2% return.
Seville: the most profitable city for office investment
Regarding offices, Seville, with 13.4%, is the capital where the highest profit can be made from this type of property. It is followed by Zaragoza (9.5%), Vitoria (9.5%), Burgos (9.4%), and Lérida (9%). Below 9% are Valladolid (8.8%), Córdoba (8.6%), Almería (8.6%), Santander (8.1%), Castellón de la Plana (8.1%), Alicante, and Oviedo (8% in both cities). The major capitals remain below 8%, with Barcelona at 7.9% and Madrid at 7.7%.
On the opposite side, Orense (6.3%), Bilbao (6.4%), San Sebastián, and Salamanca (6.6% in both cases) record the lowest profitability.
After experiencing constant increases in vacancies due to the pandemic and the rise of remote work, the office sector is regaining strength, and in the face of the current housing shortage, it is emerging strongly, driven by the conversion of offices into residential properties.
Retail spaces: the most profitable assets in almost all capitals
Idealista confirms that “retail spaces are the most profitable product in almost all capitals.” Thus, with a gross profitability of 11.1%, Murcia and Zaragoza present the highest return. They are closely followed by cities like Ávila (10.8%), Oviedo (10.7%), Lleida (10.5%), Girona (10.4%), Guadalajara, and Santa Cruz de Tenerife (10% in both cases). Barcelona achieves a profitability of 8.3% and Madrid, 8.2%.
On the other hand, Palma (6.8%), Jaén (7.1%), Salamanca (7.4%), Teruel (7.6%), Albacete, and Valencia (7.7% in both cases) record the lowest profitability percentages.
Lleida: the most profitable city for residential investment
Currently, despite the fact that major cities like Madrid and Barcelona are key locations from the perspective of residential investment, investor interest in smaller locations is becoming increasingly common.
According to data from the first quarter of 2024, Lleida is the most profitable city for investment through rental, achieving an average gross profitability of 8.1%. It is followed by Murcia (8%) and Huelva (7.6%), and with returns above 7%, Castellón de la Plana (7.4%), Jaén (7.4%), Segovia (7.3%), Almería (7.2%), Santa Cruz de Tenerife, and Cuenca (7.1% in both cases) stand out.
San Sebastián is the city where profitability is the lowest (3.9%), followed by Cádiz (4.7%), Pamplona (4.8%), A Coruña (4.8%), and Palma (4.9%). Meanwhile, the profitability of a residential property in Madrid reaches 5.3%, and in Barcelona, it climbs to 6%.
Parking spaces: the least profitable product
Parking spaces are the real estate assets that yield the lowest returns, although in some cities they remain a very interesting alternative. In Murcia (9.8%), the highest profitability is reached, followed by Ávila (8.6%), Castellón (8%), and Lérida (6.8%). In Barcelona, it reaches 6.3%, while in Madrid, the return rate stands at 5.4%.