Shopping centres are standing up to the impact of e-commerce and consolidating their market share, accounting for more than half of retail investment last year. The increase in visits and revenue in these spaces in recent years is driving millions of pounds of investment to modernise them and adapt them to consumers.
Operations such as the refurbishment of Glòries (Barcelona) after an investment of €148 million and 23 months of construction work, or the €3.2 million spent on the renovation of Portal de La Marina (Alicante), are examples of spaces that aim to increase the profitability of the asset with better leisure and restaurant offerings. Behind these changes is the search for greater visitor appeal, adaptation to new consumers with a revamped image, and the incorporation of more services for visitors in the face of the strength of e-commerce, providing them with experiences that they cannot enjoy when shopping from home. For this reason, shopping centres are proving to be one of the most interesting assets for investors.
Repositioning of Shopping Centres
The positive results of macroeconomic indicators and the favourable outlook for 2018-2020 will favour both the creation of new shopping centres, especially in secondary cities, and the refurbishment of older ones to adapt them to current demand, including spaces for leisure, dining and shopping.
Potential of shopping centres, key points for analysis
- A booming sector that feeds off others such as consumption and tourism. They represent a safe investment in the main tourist and commercial areas (Barcelona, Madrid, the Canary Islands, Alicante, Malaga, Valencia, the Balearic Islands, Bilbao, etc.), especially where commercial density is lower and per capita spending is high.
- There are currently 555 shopping centres, with more than 15 million square metres of GLA. Eight new centres are expected to open in 2018, adding more than 350,000 square metres to the existing GLA and offering new leisure and dining options.
- Product sales grew by around 3.51%, which has increased average rental income.
- In Madrid and Barcelona Rents range from €85-95/m²/month for shopping centres and €15-20/m²/month for medium-sized retail parks.
- Valencia and Seville, are somewhat lower, at around €50-60/m²/month.
- Bilbao or Malaga, which have experienced substantial growth in recent months, average between €40-45/m²/month.
- Yields vary significantly depending on the location of the asset. In the case of prime shopping centres in major cities, they range from around 5-5.51% TP3T, increasing by one point for medium-sized retail parks. In secondary markets, yields rise to around 5.5-6.51% and even higher. Among these, the markets of Valencia, Seville, Bilbao and Malaga stand out, recording the following average yields: 5.351%, 5.501%, 5.501% and 5.601%.