Spain

SpainSpain occupies an important position among developed economies in the world and the EU. In terms of GDP Spain places 14 in the global ranking while holding the fifth position in the European Union.

The domestic market enjoys a critical mass with close to 46 million consumers and a knowledge based economy, with three quarters of its production coming from the service sector. Spain has led the economic expansion since 2014 with the highest rates of output expansion in the EU, and has beaten forecasts of GDP growth in 2016 and 2017. The highly developed infrastructure aids a sound economic activity and state-of-the-art facilities can be seen in high-speed train and freight railways, logistics parks and worldwide connected ports as well as urban transport and telecommunication networks.

Private consumption represents a strong share of the output of GDP (ranging from 75% to 78%) which means retail sales have a strong correlation with families’ disposable income. Retail sales have remarkably improved in the last four years, with steady expansions since 2014 and consistent strong growth from early 2015 to mid-2017.

Record figures have been also coming from the tourist sector. Between 2011 and 2016 Spain has gained around 19.4 million tourists, and the good figures of the first half of 2017 give reasons to reach more than 80 million visitors by year-end and finish close to the first tourist destination worldwide. Tourist industry has therefore been a strong support for recent economic growth at the national level.

A number of cities are a main destination for international retailers due to the strength of the local economy, their demographic composition and exposition to tourists’ visits. To Madrid and Barcelona it possible to add Bilbao, Seville, Valencia, Palma de Mallorca and Malaga. Spanish fashion is well established and internationally known retailers such as Zara (Inditex Group), Mango, Cortefiel, El Corte Inglés, or Desigual propel retail space demand almost regardless of the economic cycle. On the other hand it is no surprise that the main international retailers continue to consider Spain as a remarkable opportunity for international expansion.

 

 

ECONOMIC SUMMARY
ECONOMIC INDICATORS*2017F2018F2019F2020F2021F
GDP2.52.01.71.61.4
Consumer Spending2.42.01.61.61.4
Manufacturing Production 2.52.32.22.01.9
Investment 3.92.92.62.42.3
Unemployment Rate (%) 17.716.615.614.814.2
Inflation %1.71.31.51.81.8
US£/€ (average) 1.01.01.01.11.1
Interest Rates 3-months (%) -0.3-0.3-0.20.10.5
Interest Rates 10-year (%) 2.12.52.93.33.6
Note: Annual growth rate unless otherwise indicated
Source:  Oxford Economics

ECONOMIC BREAKDOWN
Population46.2 million (2017F)
GDP€ 118.9 billion (2017F)
Public Sector Balance -3.1% of GDP (2017F)
Parliament Popular Party (PP) majority
Head of StateKing Felipe VI
Prime MinisterMariano Rajoy
RETAIL SALES GROWTH:
% CHANGE ON PREVIOUS YEAR
SPAIN2017F2018F2019F2020F2021F
Retail Volume2.32.01.91.51.5
Retail Value4.13.33.13.43.2

Source:  Oxford Economics

LARGEST CITIES (2016)
CITYPOPULATION
Madrid 3,142,000
Barcelona1,609,000
Valencia 790,200
Sevilla 690,500
Zaragoza661,100
Málaga569,000
Murcia441,000
Palma de Mallorca403,000
Las Palmas de Gran Canaria380,000
Bilbao345,100

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Cushman & Wakefield, Inc. - Spain: 40.463667, -3.749220

MAJOR DOMESTIC FOOD RETAILERS

Mercadona, Hipercor, Ahorramás. Eroski

MAJOR INTERNATIONAL FOOD RETAILERS

Carrefour, Alcampo, Aldi, Leclerc. Lidl, Dia

MAJOR DOMESTIC NON-FOOD RETAILERS

El Corte Inglés, Inditex Group (Zara, Bershka, Pull & Bear, Massimo Dutti, etc…), Cortefiel Group (Cortefiel, Women Secret, Springfield, Pedro del Hierro, etc), Desigual, Mango, Blanco, Decimas

INTERNATIONAL RETAILERS IN Spain (a selection)

Fnac, Primark, Ikea, H&M, Apple, C&A, Hollister, Forever 21, Superdry, Decathlon

FOOD & BEVERAGE OPERATORS

Five Guys, McDonalds, Burger King, Muerde la Pasta, 100 Montaditos, Vips, Ginos
 

TYPICAL HOURS
MONDAY - SATURDAYSUNDAY - HOLIDAYS
Shopping centers 10:00 - 22:00 (Food anchor opens 9:00) High Streets 10:00 - 21:00 (varies by region) 10:00 - 21:30

Retail Scene

The Spanish retail market is evenly spread between high streets and shopping centres with retail parks gaining in importance. The high street market is concentrated primarily in the major provincial capitals, such as Madrid, Barcelona, Valencia, Bilbao, Palma de Mallorca, Zaragoza, Sevilla and Malaga.

Madrid, Barcelona and Valencia are the three major contributors to the Spanish retail market, although there are various specific shopping centre and retail park schemes in other strategic locations that are important in the retail context.

Shopping centre: Total existing GLA in Spain is over 11,4 million sq.m. in a total of 414 schemes head of 5,000 sqm. Retail density per 1,000 inhabitants stands at 244 sq.m/1,000 inhabitants, still below European average. The amount of new space over the next two years is currently estimated at 290,000 sq.m. Prime rents in shopping centre in Spain have been stable over the years and stand currently at 85€/sqm/month for in-town schemes and 52€/sqm/month for out-of-town. Shopping centers are one of the most popular assets on the Spanish investment market.

Retail Parks Total existing GLA in Spain is over 2.8 million sq.m. Although this is now a mature market in Spain, there is still a limited number of major players in terms of both developers and retailers. Prime rents are currently at 22.50€/sqm/month in Madrid and 18€/sqm/month in Barcelona.

High Streets, the availability of prime space in major Spanish cities is scarce, but over the last years there has been an increased interest in near-prime locations. In this sense retail space demand improving as some brands are expanding or trying to enter the market.


TOP SHOPPING CENTERS BY SIZE
NAMECITYSIZE (GLA SQM) YEAR OPENED
Puerto VeneciaZaragoza206.8902007
Marineda CityCoruña, A176.0002011
ParquesurLeganés (Madrid)159.0001989
Madrid XanadúArroyomolinos (Madrid)152.8872003
BonaireAldaia (Valencia)137.0002000
Plaza ImperialZaragoza132.0002007
Megapark BarakaldoBarakaldo (Vizcaya. Basque country)127.7722004
Parque Oeste AlcorcónAlcorcón (Madrid)125.0001994
Luz ShoppingJerez de la Frontera (Cádiz)124.4302010
Parque CorredorTorrejón de Ardoz (Madrid)123.3801995


NEW ENTRANTS TO THE MARKET

Urban OutfittersUniqloDealzFive Guys

KEY FEATURES OF LEASE
ITEMSHOPPING CENTRERETAIL PARK
Lease Duration10 years5/7 - 25 years
Annual CPI ReviewYesYes
Obligatory Periods / Break Options2+3
3+2+5
Varies. Generally 5 – 7 years
Market Rent Reviews Normally after 5th year or fixed increases eg CPI +3% Normally in 10th year or fixed increases after each obligatory period/lease extension
Turnover RentYes 5% - 8%Sometimes possible 3% - 5%
Tenant ObligationsPayment of all service charge costs and property tax (IBI) plus maintenance and repair costs of fixture and fittings Payment of all service charge costs and property tax (IBI) plus maintenance and repair costs to the fixture and fittings
Landlord ObligationsPayment of the property management and the building/structural insurance. Also obliged to maintain/repair the structure and exterior of the building Payment of the property management and the building/structural insurance as well as repairs to the structure
Sub-letting / Lease AssignmentOnly with landlord permissionOnly with landlord permission