Commercial Property Spain Commercial Property Spain
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COMMERCIAL PROPERTY SPAIN COMMERCIAL PROPERTY SPAIN RECORD LEVELS OF OVER €7.8 BILLION WERE INVESTED IN COMMERCIAL PROPERTY IN SPAIN IN 2017. 2019 IS EXPECTED TO REACH A SIMILAR FIGURE TO 2018. RETAIL AND OFFICES WERE THE MAIN SECTORS IN 2018 WITH MORE THAN 3. 6 BILLION IN RETAIL INCLUDING HIGH STREET AND 2.3 BILLION IN OFFICES. THE INVESTMENT VOLUME FOR THE FIRST QUARTER OF THE YEAR HAS BEATEN RECORDS COMPARED TO THE SAME PREVIOUS PERIODS, REACHING ALMOST €1.3 BILLION. THE MARKETPLACE FOR COMMERCIAL PROPERTY IS CONTINUING TO GROW AND STRENGTHEN. KNIGHT FRANK IS LEADING THE WAY. COMMERCIAL PROPERTY COMMERCIAL PROPERTY SPAIN SPAIN THE COMMERCIAL REAL ESTATE SECTOR A STRONGER, MORE EFFICIENT ECONOMY REMAINS IN THE INVESTOR’S SPOTLIGHT, Now in its fourth year of expansion, Spain’s economic climate continues WITH A GLOBAL VOLUME OF €7.3 BILLION to strengthen. There are clear signs that the economic and occupational markets AT THE END OF 2018 are in positive growth territory and the outlook is promising. Along with the traditional interest in the retail and offices sectors, the The Spanish economy continues to outpace the eurozone, with 2.8% growth logistics market has continued to grow in the last year, reaching approximately €1.2 billion. H[SHFWHGLQ&RQVXPHUFRQÀGHQFHLVH[SHFWHGWRUHPDLQKLJKDQG unemployment continues its downward trajectory, from 27% in 2013 to The retail sector reached a maximum investment point of €3.6 billion, 16.55% in 2017 to 15.28% so far in 2018. Politically, 2018 has shown a LQFOXGLQJWKHLQFUHDVHLQ high street VWRUHVZKLFKUHSUHVHQWV0RIWKHWRWDO SRVLWLYHLQFUHDVHLQWKHQXPEHURIDXWRQRPRXVFRPPXQLW\DIÀOLDWLRQV LQYHVWPHQWLQWKH5(2IÀFHVZHUHLQVHFRQGSODFHDW3DQGDWRWDODPRXQW of €2.2 billion. Logistics continues its rapid growth, at €1.2 billion and 17%. *URZLQJFRQÀGHQFHLQWKH6SDQLVKHFRQRP\FRPELQHGZLWKXSEHDWUHQWDO forecasts, have encouraged investors to deploy capital into Madrid’s commercial The Top 5 sources of cross border capital by nationalities in Spain in 2018 real estate. Investment funds have emerged as the most dynamic purchasers. were the USA, Switzerland, the UK, Germany and France. Heightened activity from investment funds has led to a change in the origin of Macroeconomic prospects and a rising market are ensuring continuity in the buyers, with domestic capital falling as a share of the total transactional volume positive evolution of investment in real estate in the Spanish territory. as US and UK investors increase their presence. In particular, Madrid’s rental growth prospects are compelling and will continue to underpin investor appetite, resulting in the further hardening of yields in 2018. COMMERCIAL PROPERTY COMMERCIAL PROPERTY SPAIN SPAIN OFFICES BEST IN CLASS CASE STUDIES Knight Frank forecasts that the positive trend in occupier Knight Frank has earned its reputation as a leading agent in the commercial market. demand will continue in 2019 and will lead to further rental increases. RYANAIR THE ADECCO GROUP After record numbers seen in 2017 take-up owing to Ryanair has landed in Madrid with its new - Size: 4,415 sqm administrative operations, investor appetite for office product digital innovation centre Travel Labs Spain. - Location: Llano Castellano 13, Manuel Knight Frank advised Ryanair’s leasing continued in 2018 with a the total take-up of approximately Tovar 1, Príncipe de Vergara 110 of 2,000 sqm of space in Eurobuilding II, Madrid is a key location in the global 463,000 sq m. During the first quarter of 2019 take-up has located in the heart of the Spanish capital’s expansion of The Adecco Group. Knight reached around 124,000 sq m, 4% higher than the same period ÀQDQFLDOGLVWULFW7KHORFDWLRQLVWREH Frank advised and implemented a strategy Ryanair’s largest technological hub. of the previous year. of optimisation and modernisation of spaces for the group and its companies. 2XURIÀFHVGLYLVLRQLQ0DGULGKDVDQLQGHSWKNQRZOHGJH and understanding of the latest market and development M&G & WPP activity, and changing occupier requirements. - Size: 36,000 sqm We are focused on delivering intelligent, research-led - Location: Calle de Rios Rosas, 26 advice to owners and occupiers, which is tailored to - c.€150 million meet clients’ business objectives across development consultancy, marketing, leasing, and acquisitions. Knight Frank advised on one of the most complex operations of the last decade CAPITAL MARKETS with the sale and subsequent rental of the emblematic building of RR 26 to the OCCUPIER SERVICES WPP group, to form the headquarters of MANAGEMENT PRUHWKDQÀUPVLQ6SDLQZKLFKZLOO VALUATION & DUE DILIGENCE house more than 2,500 employees. It will be completely converted to implement pioneering workplace trends. COMMERCIAL PROPERTY COMMERCIAL PROPERTY SPAIN SPAIN MORE OFFICE KNIGHT FRANK’S VIEW %SPACE IN 11. MADRID 1% 2IÀFH investment volume for the first 7KHDYDLODELOLW\UDWHRIRIÀFHVSDFHKDV GRADE1 A BUILDINGS quarter of the year has beaten records increased in comparison with 2018, in Madrid reaching €960 million. Take- sitting at 11.1%, while the availability of up has been 124,000 sq m in the first Grade A buildings remains at 1.0% of the quarter. total stock in Madrid. The majority of new stock has been delivered through ,000 SQM Investment funds and are proving the 463 refurbishments and renovations. Pre- OFFICE TAKE-UP most active in 201 . In Barcelona % 9 60 leasing activity has subsequently been JANUARY TO AUGUST 2018 of investment pooled from funds and high, with many buildings close to in Madrid this level reached up to full occupancy even before they are RISE IN PRIME 67%. while in Madrid investment funds completed. The development pipeline is are predominant. Around % of this OFFICE RENTS 75 improving with around 225,000 sqm of investment has been carried out by IN THE LAST RIÀFHVSDFHSODQQHGIRUGHOLYHry foreign investors from the rest of 9% between 2019-2020 12 MONTHS Europe and the United States. PER SQM PER A continued upward trend in prime MONTH IN THE LAST rents is expected between the end €30.5 12 MONTHS of 2019 and the beginning of 2020, following a stable start to the year of €30.5 per sqm/month. PRIME 0 OFFICE %YIELDS REAL ESTATE FUNDAMENTALS ARE CONTINUING TO IMPROVE 3.75 IN MADRID Source: Knight Frank Research COMMERCIAL PROPERTY COMMERCIAL PROPERTY SPAIN SPAIN RETAIL RESEARCH RETAIL BEST IN CLASS Knight Frank produces market-leading research Knight Frank provides dedicated commercial retail property services on the retail sector, INVESTMENT RETAIL to retailers, landlords, investors and developers throughout Spain. highlighting trends and )8(1&$55$/²3ULPHÁDJVKLSIRUCOS forecasts. Recent publications Our dedicated retail team provides clear, trusted advice across the full retail 25(16(²)UHHKROGSXUFKDVH have focused on Madrid’s property spectrum on leasing, management, acquisition and disposal of retail space. 3$548(&255('256+233,1*&(175()UHHKROGVDOH Puerta del Sol and Gran Vía, PLAZA CATALUÑA 9²Prime flagship for Huawei Our specialist retail teams work seamlessly together to provide in-depth local DEALS TOP and luxury retail in Spain. knowledge, offering an up to date, 360 degree view of the market, sentiment VALUATIONS AND CONSULTANCY and practice. +50 shopping centres with a value of €5.5 billion +2.1 million sqm total GLA valued in the last 4 years Our experts are regularly appointed to work with some of the most prestigious SHOPPING CENTRE MANAGEMENT brands, landlords and investors. ÁDJVKLSVLQ0DGULG CAPITAL MARKETS 11 shopping centres fully managed in Spain: Property Management, % €3. bn Rent Management, Leasing and Tenant Fit Out Coordination 85 6 2. % investment volume investment OCCUPIER SERVICES total volume 2 Total GLA of 360,000 sqm increase year on year in retail in 2018 expected GDP growth in 2019 MANAGEMENT LEASING in High Street VALUATION & DUE DILIGENCE FIT OUT MANAGEMENT 14 shopping centres with a combined GLA of 482,611 sqm SHOPPING CENTRES: TENANT FIT OUT COORDINATION 17 shopping centres in Spain with a total GLA of 800,000 sqm Consumer Prime High Street &RQÀGHQFH,QGH[XS yields in 2018 OVERALL +13.2% since 2012 The Knight Frank Retail Team is involved in projects with over 1.5 million sqm GLA increase in retail sales 3% since 2013 105% Source: Knight Frank Research | INE | CIS COMMERCIAL PROPERTY NEW BRANDS TO THE SPANISH RETAIL MARKET COMMERCIAL PROPERTY SPAIN SPAIN COMMERCIAL OPPORTUNITY 5HWDLOVDOHVJURZWKEHJLQVWRWDNHRII Management and commercialisation have gone through 0RUHVSHFLÀFDOO\WKHLQGLYLGXDOFKDUDFWHULVWLFVRID different stages over the years, becoming fundamental FRPPHUFLDOFRQFHSWDUHFOHDUO\GHÀQHGWRDFKLHYHRSWLPXP elements and differentiators for the success of any project. occupation: design, parking, new technologies, sustainable Owners of centres are ever more demanding and require a buildings, break areas or mixed distribution. full assessment to increase the value of their assets, which goes beyond the simple signing of leases and has a clear Another guarantee of success will come from the strategic component. Knight Frank provides the strategy and consolidation of the principal chain brands in Spain, support to optimise management and create harmony in the which are the best indicator of quality at any centre. The largest chains currently in Spain are Grupo Inditex, Primark, commercialisation process. E-COMMERCE: HOW IS IT AFFECTING FLAGSHIP STORES AND SHOPPING CENTRES? H&M and Mango. The professionalism of this sector in the The commercialisation process is fundamental to the Spanish market means that the introduction of new brands in perception of an attractive