Retail investment in Spain heading for pre-pandemic levels - research

Retail investment in Spain in the first half of the year totalled €1.1 bn, exceeding the 2021 total by 10.5%, according to Savills. 

The volumes are due to a wave of shopping centre transactions and the return to a more typical institutional market, the broker and research firm said.

While supermarkets dominated transactional activity in the retail sector in Spain in 2021, accounting for more than 45% of the total invested, during the first six months of 2022 shopping centres, retail parks and mid-markets accounted for 47% of the total invested. Supermarkets accounted for 29% and high street stores 24%.

Savills research indicates that foreign buyers have been very active throughout the first half of 2022. Excluding high street transactions, of which 88% of buyers were domestic, European buyers accounted for 55% of the total volume invested in retail.

Funds accounted for more than 70% of purchases, followed by real estate companies, which represented 25% of the total volume purchased.

Luis Espadas, executive director of the retail division at Savills, said: 'We are also seeing new opportunistic capital coming into the market and traditional value add investors are once again enquiring about retail.

'Several transactions for the sale of shopping centres and retail parks are currently at an advanced stage, which leads us to believe that the final volume will be in fairly healthy pre-pandemic figures.'

In terms of mega-deals, exceeding the €100 mln barrier, the South African fund Lighthouse Properties bought the Torrecárdenas shopping centre in Almería in the first quarter of the year, while the French real estate fund Frey Invest acquired Finestrelles in Esplugues de Llobregat.
Below that figure, the same Frey Invest fund bought Parque Mediterráneo, Citygrove and Burlington sold the Bahía Real park in Maliaño to Savills IM, Carmila acquired the Rosaleda centre from Hispania, and AEW bought the Álcora Plaza centre from Goldman Sachs.

In terms of yields, Savills research suggests that they have remained stable during the second quarter of 2022, since the beginning of the year.

Prime shopping centres stand at 5.25%, retail parks at 5%, supermarkets at 4.5% and high street retail at 3.4%. Since 2021 and for the first time since 2009, prime yields for retail parks exceed the values for shopping centres.


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