Spain solidifies its lead as a key retail investment destination, with Barcelona and Madrid setting benchmarks for high street commercial property in Europe.
Europe’s iconic shopping streets are entering a new era of sustained expansion—leaving behind pandemic-era stagnation and recovery. According to The Retail Property Telescope Spain 2025 by EY, both Barcelona and Madrid now rank among the five most important high street markets in Europe. This milestone underlines Spain’s growing status in the arena of prime retail real estate, outshining other major European cities like Berlin, Amsterdam, and Lisbon in estimated rental value.
European High Streets: From Recovery to Sustained Growth
The latest data reveal that Europe’s retail property market has decisively moved beyond the post-Covid rebound. Instead, a period of rent hikes, high occupancy, and brisk expansion is underway. Spain is at the heart of this shift, with Madrid and Barcelona not only leading domestically but also taking on leading roles on the continental stage.
During the first half of 2025 alone, 70 new establishments opened on the main shopping streets of Madrid, Barcelona, Seville, and Valencia, per Savills. This activity reflects the resurgence of tourism and the “consolidation of the physical store as a key element in retailers’ strategies.” As demand expands, rent levels are rising and low availability on the high streets is fueling interest in adjacent shopping areas.
Currently, average rents for high street retail in Spain stand at €148/m²/month, with a vacancy rate of just 5.6%.
Madrid: Spain’s Dual Engines—Luxury and Mass-Market Retail
Madrid’s high street retail activity is largely clustered in two main areas:
- The Salamanca District (“Golden Mile”): Home to luxury brands along Serrano, Goya, and Ortega y Gasset streets. Average rent here is €194/m²/month (+2.6% YoY), leading with Calle Serrano at €245/m²/month. Yields average 3.7%, with daily pedestrian traffic averaging up to 13,000.
- Central Zone: The pulse of Madrid’s retail, including Gran Vía, Fuencarral, Preciados, and Puerta del Sol, is dominated by flagship stores and an eclectic shopper mix. Calle Preciados tops the chart with €260/m²/month, 3.75% yield, and a daily footfall of 50,000. The area averages €214/m²/month in rent with yields hovering around 4.2%. Gran Vía sees the highest traffic—up to 105,000 people per day.
With an overall estimated rental value (ERV) of €260/m²/month, Madrid sits just behind Paris and Rome, and above London, Berlin, Amsterdam, and Lisbon.
Barcelona: Prime Rents and International Appeal
Like Madrid, Barcelona’s retail core is divided for different audiences:
- Prime A: Portal de l’Angel, Passeig de Gràcia, Portaferrissa, and Plaça Catalunya form Barcelona’s “Golden Mile.” Portal de l’Angel recently hit €265/m²/month—the highest in Spain—with the sub-area averaging €208/m²/month. Yields range from 3.5% on Passeig de Gràcia to 4.75% at Plaça Catalunya. Foot traffic is robust, peaking at 33,000 on Pelayo.
- Prime B: Rambla de Catalunya, Rambla Canaletas, Pelayo, and Avenida Diagonal offer more conventional retail, with rents maxing at €180/m²/month and averaging €112/m²/month. Yields and daily traffic are still competitive, with some streets posting over 4% returns.
Except for Porta de l’Angel and Canaletas, all major Barcelona retail streets now have vacancy rates below 5%, signaling a near-total recovery from Covid’s impact and healthy long-term demand.
Spanish Cities Beyond Madrid and Barcelona: Surging Retail Hubs
While Madrid and Barcelona dominate Europe’s high street retail scene, other Spanish cities are quickly ascending as regional shopping destinations:
- Malaga: Marqués de Larios aligns with prime rents—€240/m²/month and a high yield of 4.85%.
- Seville: Calle Velázquez tops at €156/m²/month with strong recent retail openings.
- San Sebastián: Loyola Street achieves €150/m²/month.
- Valencia: Calle Colón reaches €118/m²/month, recently home to Spain’s largest Tous store.
- Bilbao: Gran Vía de Don Diego López de Haro sees rents at €115/m²/month.
Yields in these cities often exceed those in the capitals—ranging from 4.25% to 4.75%—driven by strong commercial activity and vibrant new store openings.
Madrid and Barcelona Set the Tone for European Retail Real Estate Investment
While Paris and Rome lead Europe in absolute rental prices—€1,417 and €1,250/m²/month, respectively—Barcelona and Madrid’s mix of high yields, healthy demand, and sustained rental growth place them among the five most important high street markets in Europe. Their ERVs surpass those in Berlin, London, Amsterdam, and Lisbon, according to EY.
Retailers and investors are responding to Spain’s vibrant shopping scene by expanding into adjacent streets, drawn by rising demand and shrinking vacancy. The country’s average shopping street rent of €148/m²/month and a low 5.6% vacancy rate reflect an active, landlord-friendly market.
Key Takeaways for Retail Real Estate Investors:
- Spain’s prime cities are leading Europe’s retail real estate recovery and expansion, offering not just high rents but also strong occupancy and yields.
- Madrid and Barcelona’s high street markets outpace Berlin, London, Amsterdam, and Lisbon in estimated rental value, second only to Paris and Rome.
- Regional cities like Malaga, Seville, Valencia, and Bilbao are becoming new hotbeds for retail investment—often delivering even higher yields than the capitals.
- Rising rents and low vacancy are pushing demand into adjacent shopping streets, signaling ongoing opportunities beyond traditional commercial arteries.
Looking to invest in European high street real estate? Spain—and especially Barcelona and Madrid—should top your list in 2024 and beyond. Monitor these markets for trends in ERV, occupancy, and yield, as they continue to define the future of European retail property investment.
