Alfonso Brunet CEO of Castellana Properties Credit: Castellana Properties
Opinion

Good Sign for the Spanish Retail Real Estate Market

“If we take a look at the commercial density figures, we find that Spain is below the European average – and even more so in relation to countries such as the USA, where the density is six times higher and the shopping center model is very different from the one in Spain.”

By Alfonso Brunet

Spain continues to register good economic indicators and is once again one of the main drivers of the euro zone. The latest published forecasts indicate GDP growth of 2.3% by 2019 and 1.9% by 2020.

These positive forecasts for the Spanish economy have a strong influence on the retail sector in Spain. Knight Frank points out that the volume of investment in the first half of the year exceeds 550 million euros, improving the investment pace of the first quarter. During those months, Castellana Properties significantly contributed to the activity of the sector with an investment of more than 100 million euros. This data confirms the potential and the pathway that retail real estate still has in Spain. If we take a look at the commercial density figures, we find that Spain is below the European average – and even more so in relation to countries such as the USA, where the density is six times higher and the shopping center model is very different from the one in Spain. Therefore, at Castellana Properties, we believe that there is still room for quality centers that can adapt and reinvent themselves in Spain.

The good economic situation is also reflected in the volume of investment. In 2018, an investment of 2.5 billion euros was made in shopping centers, retail parks, and hypermarkets. In this context, Castellana Properties has identified a retail pipeline of more than 2 billion euros, which it is currently analyzing in order to select the best matches with its strategy for investment in Spain. The objective, of course, is to increase the company’s portfolio and boost its growth.

The future of companies in the sector depends, to a large extent, on their ability to adapt to the requirements and demands of customers. Malls no longer serve merely as places for shopping activity, giving rise to areas that seek to offer their users experiences and entertainment. At Castellana Properties, we firmly believe in this new way of understanding the business, which is why our shopping centers offer all types of activities and events to attract customers, such as the recent exhibition of Batman at Vallsur shopping center.

Other factors that have to be taken into account are digitalization and new sales channels. Companies should see digitalization as an ally and an added tool to provide the best service and products to their consumers. The physical and digital worlds are perfectly complementary and respond to the different needs and consumption habits of users. The objective is to get to know customers in the best possible way in order to provide them with more personalized services and offer what they really need and demand. We must adapt to our customers – not the other way around.

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