The Spanish economy has continued to strengthen and grow over the past 3 years; job creation has gone up which has reflected strongly in the office market. Office leases have reached an all time high in Madrid, in the first half of 2017 office take-up reached 231,000 – a record level! The challenge Spain is facing; high demand and limited space – driving rent up. This could foresee office developments coming to the region very soon.
There is high investor interest in Spanish real estate, Savills have reported that in Q1 2017 investment volume was up 22% year on year. Savills also reported that over the next 24 months, almost 500,000 sqm of retail space is expected to come onto the market, nearly 200,000 sqm of which will be delivered in 2017. According to the ShopperTrax index, footfall in shopping centres has increased for the second year in a row. This is demonstrating the positivity in the market and another reason for the volume of development.
Some large retail developments include:
The Shopping Centre Plaza Rio 2, Madrid (LSGIE) – This modern centre is expected to open in October 2017, creating approximately 1,000 new jobs. Over 150 brands have already leased space with a clear focus on fashion and F&B. This centre will bring LSGIE’s portfolio to a total of 9 shopping centres in their Spanish territory.
Terrassa Plaça, Terrassa/Barcelona (Citygrove) – Construction began in July 2016 and the centre is expected to open in October 2017. The scheme will boast 30,478 sqm and has already leased space to a number of tenants.
Glories, Barcelona, (Unibail Romamco) – This is an open air shopping centre set to open by the end of 2017. This centre has undergone a full renovation and extension which will add space for 130 new stores!
intu Costa del Sol, (intu) – This development will consist of leisure attractions including; open-air skiing, a theme park and an aquarium along with a hotel, conference centre and retail units. There are already plans to develop this scheme further as intu have confirmed they have bought the land adjacent to enable further design and growth.
Open Sky, Madrid (Compagnie De Phalsbourg) – Open Sky will be Phalsbourg’s first project in Spain following their success in France. The centre will boast 100 shops and have an area dedicated to water shows, bars and restaurants and will offer 3,500 car parking spaces.
There are more developments than listed above but it is worth noting: 85% of the retail schemes in Spain are more than 10 years old. The volume and size of the current developments demonstrate the confidence of the market’s future and it can be expected that plans will come forward for more developments, refurbishments and expansions in the near future!
Overall, the market is looking strong; high investor interest, increased footfall, numerous developments and a continually improving economy. With this in mind, these new and future developments can expect high rental interest and a successful future.
Kat Whitehead, Senior Marketing Executive, Foundation Recruitment