The retail sector and in particular the shopping centre segment in Spain have been the hardest hit by the pandemic but the outlook is improving as retail sales recover under less restrictive public health policies.
According to the Spanish Association of Shopping Centres (AECC), sales in Shopping Centres went up by over 21.4 % in 2021.
The upward trend of sales continues in 2022, as shown by the Retail Trade Index (RTI) at current prices, excluding service stations, which recorded a 10.4% YoY growth in June, according to the latest data published by the National Statistics Institute.
Personal equipment grew the most with a 16.7% YoY sales growth, while food rose by 11.5%.
Amid concerns regarding the impact of high inflation on consumer confidence and consumption, retail sales are expected to further increase and recover to pre-pandemic levels, in real terms, by 2023 according to Oxford Economics.
The ongoing recovery is leading investors to resume their investments in the shopping centre market.
Among the largest transactions in 2022, the stand out came in January when Castellana Properties, controlled by Vukile Property Fund, bought a 21.7% stake in Lar España, a leading Spanish REIT that owns high-quality retail assets with a gross asset value in excess of €1.4 billion.
In March, the South African Public company Lighthouse Properties acquired Torrecárdenas Shopping Centre, in Almería, with over 60,000 square metres of gross leasable area and an acquisition value of €162.5 million.
In July, the French company FREY bought the Parque Mediterraneo retail park, comprising 66,000 square metres, for €83 million. This transaction was closed shortly after the acquisition in June of Finestrelles open-air shopping centre in Barcelona, for €127.5 million, although the figure could be adjusted later depending on the performance of the asset.
The German fund ECE is also negotiating the purchase of the Splau shopping centre in Barcelona for around €350 million according to Expansion newspaper.
Activity is increasing not only in terms of transactions but also in terms of new openings and developments. International investors and developers are deploying capital into the Spanish market with innovative concepts that combine several uses and offer a richer customer experience.
In March this year, the Dutch real estate company, Ten Brinke inaugurated in Madrid, Mirasierra Gallery, a retail gallery of 9,500 gross leasable area that combines healthcare and retail. This pioneering commercial space in customer experience is the first in Spain to have the so-called "three crossroads" of pharmacy, veterinary centre and health clinic.
AQ Acentor, owned by the German company Aquila Capital, is planning the development of a tertiary project in Valencia, called Infinity, with an investment of around €350 million. The development will comprise 23,000 square metres of tertiary use including hotel, offices, residential and a shopping centre of 90,000 square metres gross leasable area offering new leisure concepts and experiences like artificial waves, beach club, free style indoor, virtual reality and escape rooms. The opening is expected for autumn 2024.
The Belgium group Equilis will invest €110 million in Nexum Retail Park, a mixed-use project in Fuenlabrada comprising a retail park of more than 26,000 square metres, flexible office space over 1,500 square metres, and a 17,000 square metre student residence. The opening is scheduled for 2023.
Eurofund and Frey will invest circa €100 million in a 55,000 square metre retail project called Promenade Lleida with a strong focus on sustainability. The retail park will have solar panels for electricity generation, charging points for electric vehicles, recycling centres and a water reservoir to irrigate the 20,000 square metres of green areas and the more than 1,000 trees that will be planted.
The shopping centre market in Spain is expected to continue its profound transformation with new developments focusing on customer experience, leisure and sustainability.
By 2024, 30 shopping centres and retail parks are expected to open in Spain adding 787,000 square metres of gross leasable area according to the AECC.