"The recovery in tourism and domestic demand is rekindling investment in commercial premises"

Juan Pedro Hernández

Retail High Street Andalucía
juanpedro.hernandez@savills.es

In general terms, brands have reactivated their expansion plans with Malaga as one of their main focal points.

The increased activity of operators reflects the quick recovery of the city. The return of tourism and domestic demand have brought the availability rate in the prime area to below 5% after closing 2021 at 9%.

Over the last 12 months there has been significant off-market activity in the city's main shopping district, following the incorporation of brands such as Suarez and the relocation of others such as Pandora and Adolfo Domínguez.

In relation to rents, Malaga has recovered pre-Covid levels, although with a readjustment of around 5% in the prime area and around 20% in Calle Nueva and its surroundings.

In the commercial property investment market, demand from investors of all profiles is picking up. Interest rate rises are expected to push asset yields higher.

The evolution of demand and rents, together with the expected increase in yields, will maintain investors’ focus on Malaga.

AVERAGE PRICE AND VARIATION

AVAILABILITY BY AREA

YEAR-ON-YEAR COMPARISON OF AVERAGE RENTS BY AREA

COMPARISON OF RENTS BY AREA

LATEST OPERATORS TO ARRIVE IN THE CITY

Highlights

Rents are stabilised in the prime area at €180/sq m
Following the pandemic, the return of tourism and the increase in population and affluence in the city will boost the number of operations to record numbers in 2022
Expansion of retail interest towards Alameda Principal, which begins its consolidation as a continuation of Marqués de Larios or Calle Nueva
Core assets continue to be the main attraction for investors
Rising interest rates and inflation are expected to lead to an upward adjustment in yields, making it necessary to adjust the gap between sellers and buyers

“The intensification of commercial activity has brought about a recovery in rents”

New needs are setting new trends, with solutions that improve the consumer’s omnichannel experience, as well as logistics and sustainability

More and more operators, mainly in the fashion industry, are implementing technological advances that merge the off-online experience, facilitating the purchase by allowing the product to be picked up at the checkout or delivered to the customer's home

More energy-efficient shops. Operators are increasingly looking for green shops with more efficient climate control, the latest advances in aerothermics or energy-saving lighting

Shops as last mile points. Using the physical shop as a logistics point aims not only to shorten lead times, but also to save part of the transport chain, thus providing savings for the environment