High street investment will exceed the €1bn in Spain

High street investment will exceed the €1bn in Spain

With the assets to be valued upwards, the beginning of the year was marked by the conclusion of major operations carried out by international giants. This is the case of the acquisition by Deka of a portfolio of 16 stores to Inditex, which was closed for more than €400 million, or the €113 million paid by Hines to become the owner of Paseo de Gracia 17 (Barcelona) and the €103 million spent by Generalli (in the purchase of Preciados 9 (Madrid).

If these forecasts shown by CBRE in the study Las claves del retail en España (The keys of retail in Spain) are confirmed, 2018 will surpass the last peak of market, recorded in 2015: €1,010 million, after the last two years have registered an annual average of 800 million invested in this asset class.

Institutional investors are the main drivers of investment in this segment. At the same time, Madrid and Barcelona are yet the major centers of capital attraction, concentrating 79% of the total volume invested.

"However, other cities in Spain are at their peak and there is a growing demand for product to invest in cities such as Bilbao, Valencia, Sevilla or Malaga," it can be read in the document.

In addition, the pressure on profitability continues strong and in 2017 yields have reduced further, reaching 3.25% in Madrid and 3.5% in Barcelona for the most prime product.

These factors, along with a shortage of product available in Madrid and Barcelona, is motivating the expansion of the spectrum of investors, with its interest to extend now to other Spanish cities. It should be recalled that in 2017, a share of €170 million of high street investment was allocated outside Madrid and Barcelona, standing out operations such as the purchase of H&M store in Reyes Católicos de Granada, by M&G or the sale of building of El Corte Inglés in the Plaza de la Magdalena, in Seville.

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