Madrid, Spain, is a city known for its rich history, vibrant culture and bustling urban life. And now it has a downtown hub to match.
Downtown Madrid has undergone a makeover, particularly at the Puerta del Sol, a historic square that lies at the heart of this dense metropolis. With significant investments and new traffic restrictions that have made the plaza more accessible to pedestrians, Puerta del Sol is poised to become an even more attractive destination for retailers and visitors alike.
In just the past few years, luxury brands like Four Seasons Hotels and Hermés have contributed to Madrid’s post-pandemic retail recovery.
A Jewel in Madrid's Crown
Puerta del Sol has always held a special place in the hearts of both Madrileños and travelers, attracting around 110 million visitors annually even before the recent improvements.
“It is one of the most renowned squares in Europe,” said Mike Pegler, head of United Kingdom at Beverly Hills, California-based Kennedy Wilson, which owns a retail development in the plaza. “Now, with the [focus on pedestrians] and the improvements to the public realm around our property, we believe it is set for further success.”
Puerta del Sol has been changing for ages, according to broker Pablo Kindelan of Madrid-based Rubica Real Estate, which has closed several recent retail deals near the square. The latest renovation this year promises a pedestrian space that is accessible. Highlights include a new central glass pavilion and an oval-shaped fountain housing the mounted statue of King Carlos III that helps anchor the plaza. Other landmarks, like another statue of a bear with a strawberry tree, have been moved. Main streets feeding into the plaza such as Montera, Carretas and Arenal have also been renovated in recent years.
Madrid's mayor, José Luis Martínez-Almeida, last year announced the final phase of the 21st-century transformation of Puerta Del Sol. The architectural vision crafted by José Ignacio Linazasoro and Ricardo Sánchez culminates in a complete pedestrianization of the area, along with improved access pathways connecting it to the recently refurbished Sol – Alcala axis and San Jeronimo.
The renovation project encompasses various aspects, including removing the current "hump whale" structure of the Sol Cercanías train line and creating fresh, inviting entrances for the remaining metro exits, aimed at increasing transit capacity.
The aforementioned statue of Carlos III was relocated to provide better access to Preciados, the main shopping street. Furthermore, Madrid's iconic symbol, El Oso y Madrono, will be relocated to ensure it is less obstructive for pedestrians. After decades, trees will also make a return, lining the south side of the square.
This comprehensive revitalization effort promised to elevate the square to even greater prominence as Madrid's most renowned and bustling area.
Kindelan added that the latest changes, including increased traffic restrictions, make Puerta del Sol more attractive to retailers. "Traffic restrictions are increasing, which will make it easier for pedestrians to move around and therefore make it more attractive for retailers,” he said.
Retailers value Puerta del Sol and its surrounding areas as prime shopping destinations. "They appreciate the removal of barriers to pedestrian crossings and improved visibility," said Kindelan. "In that sense, if the kiosks and sculptures are located further away from the stores and if the subway entrance does not block the view of their shop windows, they will appreciate it."
A Retail Renaissance
Puerta del Sol got a big boost last year with the opening of Centro Canalejas Madrid (CCM), which unites in a single building seven historic properties located in the heart of the capital. The owner is a joint venture between developer OHL Desarrollos and Mohari Hospitality.
Occupants in CCM include the first Four Seasons hotel in Spain, 22 branded residences, and a new parking lot with more than 400 spaces. Another new arrival in the CCM is Galería Canalejas, a luxury shopping destination featuring more than 40 international brands, as well as a food hall with more than 13 restaurants, including some from recognized Michelin star-rated chefs like Julián Mármol and Rubén Arnanz.
Shops in Canalejas include Hermès, Cartier, Jimmy Choo, Louis Vuitton, OMEGA, Rolex, Saint Laurent, Valentino and Zegna.
An Apple Store also anchors the east side of the Puerta del Sol, near the metro.
Also in the works is Sol 9, Kennedy Wilson’s plan for a 36,000-square-foot retail development in what was once a vintage residential building in Puerta del Sol.
“The feedback on our scheme has been very positive, and we are in detailed discussions with several potential tenants,” Pegler said in a statement to LoopNet. “The ongoing improvements to Puerta del Sol 9 will undoubtedly enhance the overall experience for visitors to Puerta del Sol.”
Rubica Real Estate, with over a decade of experience in Madrid's real estate market, has been involved in several recent deals near Puerta del Sol, including Lefties Montera 25, Scalpers Gran Vía 27, Skechers Gran Vía 31, and more. As Kindelan said, the ongoing renovations in Puerta del Sol have been part of a broader urban rejuvenation initiative.
"While the renovations coincided with the post-pandemic recovery," Kindelan said, "the general public's response has been positive. Most people understand the necessity of pedestrianizing the city center, and retailers mostly share this positive sentiment.”