The high street prime retail market in Madrid and Barcelona remains strong. During the first quarter of 2023, total retail space take-up in both cities increased by 10.35% compared to the same period in 2022, reaching 9,662 sqm compared to 8,756 sqm a year earlier, according to Cushman & Wakefield data.
The availability of retail space on the main prime streets has declined in both markets in recent years. In Barcelona, the availability rate has fallen from 7.6% in March 2022 to 5.2% in the same period in 2023. Meanwhile, in Madrid, the availability rate stands at 3.5%, which represents a reduction of 1.4 basis points compared to the same period in 2022, when it was 4.9%.
Domènec Casellas, head of retail high street at the consultancy firm, explains that "the continued decline in availability rates in the prime and super-prime sections of the main shopping streets of Madrid and Barcelona is largely due to the reactivation of international tourism which, in the case of Barcelona, has seen a decline in available retail space for six consecutive quarters, given the context of its recovery".
Gran Vía and Passeig de Gràcia, the highest prime retail rents
Steadily rising demand and the lack of available retail space in Madrid and Barcelona have led to an increase in prime rents in the most exclusive areas of both cities. In Madrid, Gran Vía has seen a 4.44% year-on-year rise in prime rents, from 225 euros per square metre per month to 235 euros in the first quarter of 2023.
Meanwhile, in Barcelona, the highest growth has occurred in Passeig de Gràcia, where rents have reached 245 euros per square metre per month in the first quarter of 2023, representing an increase of 6.52% compared to the same period last year.
In annual terms, the consultancy firm has observed a good dynamism in the commercial real estate market. During the 12 months between April 2022 and March 2023, there has been a 37% increase in the number of contracts signed in the prime and super-prime commercial axes compared to the pre-pandemic period (April 2019 - March 2020). Furthermore, in terms of retail space, the increase was 35% in the same comparative period.