Explore Spain’s real estate market as high street rents hit €267.5/m², with shopping centres and retail parks also seeing significant rises.
High street rents have experienced a notable uptick, rising by 2.5% to reach €267.5 per square metre, as reported by JLL. In a more pronounced trend, shopping centres are projected to see a 5% increase in 2024, culminating in a monthly rent of €105.5 per square metre. Retail parks, not to be outdone, are also on the rise, with rents climbing 4% to €21 per square metre per month.
The commercial sector is increasingly gravitating towards prime street-level locations. This persistent demand for high-quality high street spaces, juxtaposed with a dwindling supply, has been a significant driver of annual rent growth in both Spain and Portugal, according to JLL data reviewed by Eje Prime. By the close of 2024, the consultancy firm noted an average rent of €267.5 per square metre per month for street premises in the Spanish market, marking a 2.5% increase from the previous year. However, JLL cautions that “pre-pandemic levels have not been recovered,” with current figures still 3% shy of the historical zenith.
Interestingly, shopping centres and retail parks are outpacing high street growth in Spain. The former recorded a monthly rent of €105.5 per square metre, reflecting a 5% increase compared to the end of 2023. Retail parks, meanwhile, reached €21 per square metre per month, signifying a 4% growth. JLL attributes this robust performance to the “effective functioning of shopping centres and retail parks in Spain,” where annual sales and footfall have surpassed pre-pandemic levels, coupled with solid occupancy rates, thereby propelling prime rents in both asset categories.
JLL Research posits that the ongoing imbalance between supply and demand will exacerbate “competitive tension” among leading brands, all vying for quality spaces. This competitive landscape suggests that rental income levels are likely to continue their upward trajectory in prime locations.
In a detailed analysis of six prominent shopping streets in Madrid and Barcelona—namely Gran Vía, Preciados-Sol, Serrano, Fuencarral, Portal de l’Àngel, and Paseo de Gracia—JLL documented 80 new openings during the 2024 fiscal year, representing a 9% increase over the previous year. The availability rate at the end of the last year stood at a mere 4%, a decrease of 0.5 percentage points compared to 2023.
The consultancy notes that “dominant retail brands are executing ambitious expansion plans for their stores in the coming years.” Furthermore, digitally-native brands have been making their mark by opening physical stores in Spain. Notable entrants include Eme Studios, Scuffers, Hoff, Siroko, and Minimalism Brand on Fuencarral Street in Madrid, while Nude Project and Blue Banana have expanded their presence, effectively doubling their points of sale. In Barcelona, Blue Banana and Alohas have also made their debut on Rambla de Catalunya.
JLL’s report emphasizes that during the 2024 fiscal year, retail operators have demonstrated a consistent interest in securing premium retail space, particularly in strategic locations. This demand has been fueled by a 12% increase in international tourist numbers and their spending (relative to 2019), alongside rising consumer confidence and the continued recognition of physical stores as pivotal assets in retail strategies.
The analysis draws on data from GlobalData, Oxford Economics, Eurostat, ONS, Statista, and JLL Research, which collectively suggest that the shift towards online retail spending is beginning to moderate. While the digital channel experienced a remarkable 17.3% surge in sales between 2020 and 2023, forecasts for the period from 2024 to 2029 indicate a more tempered increase of 6.7%.
Moreover, “high employment levels and real income growth, coupled with declining interest rates, will further bolster consumer spending and retail sales,” according to the JLL document. Data from Oxford Economics reveals that private consumption grew by 2.9% in 2024 compared to the previous year and is anticipated to rise by 2.3% between 2025 and 2027. Retail sales, having grown by 3.4% in the last fiscal year, are projected to maintain this growth trajectory in the upcoming three years.
