Spain real estate investment is witnessing a remarkable transformation as high street premises investment surges by 73% in 2024. With total retail investments reaching €2 billion, private investors are playing a pivotal role in this growth, particularly in prime areas.
In a remarkable turn of events, the Spanish real estate landscape has witnessed a staggering 73% surge in investment within high street premises in 2024, as reported by Savills. Total retail investment has soared to an impressive 2 billion euros, effectively doubling the figures from the previous year. This meteoric rise can largely be attributed to private investors, who have collectively expended 300 million euros in prime locations, thus solidifying their role as pivotal players in this burgeoning market.
The Retail High Street Spain report, unveiled by Savills on Thursday, reveals that investment in commercial premises has reached a noteworthy 407 million euros in 2024—an increase from 235 million euros in 2023. This figure accounts for 20% of the total retail investment for the year, positioning the high street segment as the second most lucrative area, trailing only behind shopping centers. The private investor’s dominance is underscored by their substantial contribution, which constitutes 74% of the total investment, marking the highest recorded figure in the annals of this sector.
Savills further elucidates that the market has been predominantly influenced by Spanish investors, who have injected a remarkable 336 million euros into the ecosystem, representing 82% of the total investment volume. This statistic starkly contrasts with the historical average of 51%, signaling a transformative phase for the high street segment. Conversely, investment funds have taken a backseat in 2024, accounting for 56% of transactions, with American and French investors responsible for 38% and 13% of the divested volume, respectively.
Investment interest has coalesced around prime areas, encompassing both leased premises and vacant properties necessitating management with a pronounced commercial focus. Notably, the principal shopping hubs of Madrid, Barcelona, and Valencia have attracted a staggering 88% of the total investment volume over the past four years, firmly establishing themselves as the most sought-after locales.
In terms of yields, stability has been the name of the game. By year-end, prime rates in Madrid have seen a slight adjustment of 10 basis points, settling at 3.75%, while Barcelona’s rates have remained steady at 3.85%. Conversely, yields in secondary hubs have experienced compression, with rates dipping to 4.25% in Madrid (a decrease of 25 basis points) and 4.40% in Barcelona (down 10 basis points).
Among the notable transactions in Madrid, Savills highlights the WOW building at Gran Vía 18, the premises at Sol 5, and the establishment at Gran Vía 44, currently leased to Five Guys. In Barcelona, the sale of the currently vacant Paseo de Gracia 45 and the acquisition of Colón 11 by the Mutualidad de la Abogacía in Valencia stand out as significant developments.
Savills concludes with an optimistic outlook, asserting that “in an economic environment characterized by moderate growth and a modicum of uncertainty regarding shifts in global trade policy, the high street investment market is poised for a year of remarkable activity.” The firm anticipates that private investors will continue to drive opportunities, while core funds are expected to gain traction in both the acquisition of prime assets and the divestiture of their portfolios.
