_The Shopping Centre Comeback: More Than 1 Million New Sqm

Shopping centre stock in Spain now stands at over 16 million sqm. Between 2011 and 2015, the average amount of new space coming on to the market each year was 260,000 sqm. 300,000 sqm of new shopping centre space is expected to be completed in 2016 (including centre extensions) and 425,000 sqm in 2017.

febrero 13, 2017

Shopping centre development is therefore expected to increase, especially after two subdued years (2014-2015) that saw a combined total of just 230,000 sqm added.

Some of the main shopping centres currently under construction are the Torrecárdenas shopping centre in Almería (65,000 sqm GLA), Alfafar Park in Valencia (close to 100,000 sqm GLA) and the Plaza Río 2 centre (39,000 sqm) developed by LSGIE in Madrid. In September, Carrefour opened its 66,000 sqm (GLA) Fan Mallorca Shopping centre.

The provinces where projects of over 50,000 sqm will be completed are Almeria, Valencia, Madrid, Granada, Majorca and Las Palmas. Prime shopping centre rents have generally remained stable. The slight increases in footfall and sales have resulted more in a reduction of temporary rental discounts than actual rental increases. However, rents are expected to rise in 2017, as long as the economy continues to recover.

In 2015, shopping centre sales figures improved, climbing by an average of 5.5%. 2016 is reaffirming this trend, with comparable sales in the shopping centres analysed rising by 3.9% during the first months of the year.

This has resulted in a significant jump in average spend per customer for the first time since 2010, rising from €10.50 in 2015 to €11.70 in 2016. All business sub-sectors (Fashion, Accessories, Leisure, Electronics, Restaurants, Food & Beverage, Household and Services) increased their sales in the first few months of 2016, consolidating 2015’s results, when sales in all sub-sectors climbed by over 4%.

Prime shopping centres tend to have very low vacancy rates. This rate is even lower for prime shopping centres in Madrid and Barcelona, which have particularly high occupancy rates and very often have waiting lists.

Non-prime shopping centres tend to have vacancy rates of between 10% and 15%. Rents in dominant centres in secondary locations are now on the up thanks to increased interest from retailers and the reduced amount of space available. In other centres that are not as well positioned or located, there continue to be rent reductions, temporary rental discounts and large amounts of vacant space.