The aggressive pricing strategies of Spanish retailers has helped to stabilise rents, according to Savills. The international real estate advisor reports that primary rents for shopping centres are in the region of EUR 90 m2/month and retail parks at EUR 16 m2/month, which is consistent with 2009 levels.
The stabilisation in rents is linked to retailers introducing 30-70% discounts in product pricing or assuming the cost of the July 2010 VAT increase, in a bid to encourage consumer spending.
As a result, footfall and turnover have increased while vacancy rates have declined. The report also suggests that Spain’s retail centres present opportunities for reasonably priced rents and that this has been a draw for those retailers who have entered the market this year.
International retailers that have entered the market include Hollister and Forever 21 who have been attracted to prime centre La Maquinista, in Barcelona. Household brands Bricor, Worten and Darty as well as different sector brands including Decathlon, Merkal and Feu Vert have all been drawn to major schemes.
The investment market also shows signs of revival with a 40% increase on signed transactions between January and October 2010, compared to the previous year. The total sales figure stands at EUR 540 mln, 4% higher than the same time period in 2009.
About 42% of investment volume has been concentrated in supermarket and hypermarket sale & lease back transactions rather than more typical shopping centre or retail park investment. Larger portfolio transactions have seen international players buying from Spanish sellers, with the US, Netherlands and UK accounting for 89% of the total amount invested.