Market Report Spain Retail Warehouses
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Savills World Research Spain Retail Market Report Spain Retail Warehouses GRAPH 1 GRAPH 2 New Developments by Type of Scheme* Consumer Confidence and Retail Sales Small Medium Consumer Confidence Index Large Very Large Leisure Retail Warehouses Retail Sales (right axis) Factory Outlets Retail Parks (SC+RW) 120 10% 35 100 30 5% 80 25 0% 20 60 -5% Growth Annual 15 40 -10% 10 20 5 0 -15% 0 2015M04 2016M04 2017M04 2018M04 2005 M04 2005 M04 2006 M04 2007 M04 2008 M04 2009 M04 2010 M04 2011 M04 2012 M04 2013 M04 2014 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018* Source: Savills Aguirre Newman / * forecast Source: CIS / INE SUMMARY Record high investment in retail warehouses in 2017 ■ The Spanish economy shows signs ■ In the changing climate, retailers impeding rental growth in the retail of a more steady recovery. For 2018, and landlords must ensure that warehouse sector. a growth of 2.7% is forecast, four the retail park is aligned with the tenths less than in 2017. market, through joint management, ■ In 2017, four retail parks were incorporation of new brands, and developed, totalling more than ■ During the first nine months of diversification of activities. 54,300 sq m. If all the forecasts 2017, e-commerce grew by 25%. are met, ten retail parks will be From the sectors present in retail ■ Three years ago traditional developed in 2018, totalling more parks, Electronics captures the retail warehouse operators started than 250,000 sq m. highest share of online sales. opening units in urban locations, as a response to the need for expansion, ■ During the first four months of ■ With 94 retail parks and a floor client diversification and adaptation 2018, the retail market accumulated area of more than 2.4 million sq to the digital world / ecommerce almost €495m of investment, around m, Spain is currently fourth in the challenges. €95 m of which corresponds to the European ranking. The retail density retail warehouse market. for retail parks is 52 sq m per 1,000 ■ The lack of availability of prime inhabitants, still far below the products and the slowdown in the European average of 65 sq m. diversification process of retail offer are the main factors which are savills-aguirrenewman.es/research 01 Market Report | Spain Retail Warehouses Economic Overview In 2017, the Spanish economy "Along with a more sustained economic continued to show strong dymanism growth expected in 2018, the Spanish and a more steady recovery than the previously recorded expansive retail market will maintain its attractiveness, cycles. In 2017, the GDP grew for and its progress will be reflected in rising the fourth consecutive year at a rate of 3.1%, two percentage points less investment volumes and the development of than the previous year, but above the average of the other Eurozone retail warehouses" Gema de la Fuente, Research countries (2.3%) and economies such as Germany (2.2%), United slowdown is largely explained by the Consumer confidence ended 2017 Kingdom (1.7%) and France (1.8%). evolution of private consumption, with a y-o-y increase of almost which will grow at the same pace as eight basis points. This was due For 2018, Focus Economics household income, thus reducing to increased public confidence forecasts a growth of 2.7%, four the expansion momentum gained in in the economy. The Centre for points less than in 2017. The previous years. Sociological Research (CIS) notes that this average is only one tenth The CPI´s interannual rate for the below the one obtained in 2015, GRAPH 3 month of December 2017 fell to which is currently the historic high in Main Economic Indicators six bps points, standing at 1.1%, the series. The accumulated value in according to the definitive economic April was 97.88, two points less than data published by the National the accumulated value in 2017. Household consumption Employment CPI Institute of Statistics (INE). The CPI 6% forecasts for 2018 in Spain ensure Throughout the whole of 2017, stability and few notable changes, retail sales increased by 1.4% in 4% with some subtle increases. The both the seasonal and calendar 2% latest CPI published (March) shows adjusted figures. The Canary Islands a value of 1.2%. (3.2%) and the Balearic Islands 0% (2.8%) registered the highest rates. In 2017, the Spanish economy Catalonia, Extremadura (both with -2% generated 560,000 jobs, which -0.2%) and País Vasco (-0.1%) are Annual Growth Annual represents a total number of almost the only autonomous regions with -4% 19 million employed people, 2% decreases in the 2017 sales index. more than in 2016. During the first In March 2018, the retail sales index -6% quarter of 2018, the unemployment registered an annual growth of -8% rate was 16.74%, two percentage 1.9%. points below the figure of the first Q4 02 Q4 03 Q4 04 Q4 05 Q4 06 Q4 07 Q4 08 Q4 09 Q4 10 Q4 11 Q4 12 Q4 13 Q4 14 Q4 15 Q4 16 Q4 17 quarter of 2016. E-commerce Source: INE The rapid progress of E-commerce in Spain is unstoppable. According GRAPH 4 to the National Commission of Trade Volume Share in E-commerce by Category 2017* Markets and Competition (Comisión Nacional de los Mercados y la Competencia – CNMC), in 2016 (last full year available), online transactions of products and Electronics Leisure 12% services accumulated a turnover of 14% €24,185m, 21% more than in 2015. Services 7% Rest of During the first nine months of 2017, categories turnover amounted to €21,880m, 69% Food Fashion representing a 25% y-o-y increase Retail 7% 22% and 90% of the 2016 annual total. categories Health 31% 5% By considering only the categories Household most susceptible to being 4% incorporated into shopping centres Entertainment Department Stores and retail warehouses, we obtain a 3% 25% Restaurants figure of €6,742m transacted in retail 2% categories, a figure that represents a 27% y-o-y increase, two percentage points above total growth. Source: CNMC / Accumulated Q3 2017 02 June 2018 During the first nine months of Decathlon (which ranks first in the of locations where opportunities are 2017, the retail sectors which most total ranking), Worten, Media Markt detected. increased their transaction value and Ikea. This index measures were Services (86%) and Household the customer's journey through The great challenge lies in boosting (70%). In 2016, however, the sectors the different purchasing channels the adaptability to new market which increased most were Grocery (online, mobile and physical store). trends and the demand of an (61%) and Food & Beverage (47%). increasingly volatile consumer. This result demonstrates the degree Not all activity within a retail of competitiveness that retail brands To achieve this, the competitive warehouse has the same weight. now have as real drivers of market advantages of the retail warehouse The electronics sector, with 12% changes in Spain and the omni- format, that is to say, its of the total retail business in distribution channel as a growth convenience, easy accessibility, e-commerce, accounts for the strategy. parking, wide commercial offering largest online sales. and competitive price should be Trends utilised. In addition, efficient and However, during the first nine The retail warehouse sector active management ensuring the months of 2017, this activity rose in Spain remains healthy. The commercial offering is aligned with by 9%, registering a slowdown in duration of lease contracts, the the socio-economic characteristics growth of 11 percentage points stability in investment returns, and of the environment should be compared to 20% the same period the emergence of market niches undertaken. in 2016. where there is still potential for new developments are some of the The search for a new shopping Activity in the home sector (a reasons for the continued growth of experience, new technologies and constant in retail parks) had the the sector. the multi-channel strategy are some opposite experience, with its of the factors that are, to a large transaction volume growing by 70%, The main retail warehouse operators extent, promoting change in the compared to 23% in 2016. are boosting the trend to convert retail park sector. The attractiveness physical stores into showrooms that of these complexes will also be In spite of this, it is important to allow online consumers to examine increased when unique activities consider that online sales of home the product before buying it. The in retail parks, such as fashion and products has few supporters, and click and collect or click and deliver accessories, restaurants or even currently, it barely represents 4% of formats facilitate the purchasing leisure activities geared towards the the total retail activity transactions. process by ensuring all channels are whole family gain importance. already integrated. With regards to the current The arrival of new entrants is a positioning of the different brands Brand expansion policies determining factor in the promotion in the online world in accordance are focusing on gaining the of this change from the traditional with the latest index prepared by necessary funding in order to both concept of retail parks as a mere MHE, four logos have been chosen refurbish and modernise current revenue-generating scheme to a from ten present in retail parks establishments with the latest destination where activities are both based on the scores obtained: technology and expand the number more varied and more novel. Retail Park Stock GRAPH 5 Retail warehouse stock already New Openings exceeds 2.4 million sq m. This places Spain in fourth place in the European GLA Shopping Centres GLA Retail Parks ranking of countries with the largest surface area behind the United 1,200,000 Kingdom, France and Germany.