The Spanish commercial real estate market is expected to witness a compound annual growth rate (CAGR) of approximately 9% during the forecast period. With a population of almost 46 million, Spain is one of the largest countries in Western Europe. The population is expected to grow by around 1.2% in the coming years, which is likely to increase the demand for commercial spaces in the country.
Before the Covid outbreak, the economic situation of Spanish households and companies in the commercial sector was generally stronger than in previous years. The number of new properties being built is not excessive compared to demographic trends. However, the economic impact of the Coronavirus will affect the labor market and may slow down the start of new construction projects.
The institutional market in Spain is largely dominated by investments in the office and retail sectors, which represent 40% and 44% of the Spanish IPD index, respectively. Major market players are looking at cities like Barcelona for office spaces as it is one of the most prominent cities for startups, innovations and technologies in Europe.
A key market trend is the adoption and demand for office space in Spain. In Q4 2020, there was steady growth in office space occupancy from Q2 2020. However, the full impact of the recent Covid outbreak is yet to be realized, and experts believe that the pandemic will have a severe impact on businesses, leading to lower demand for office space and higher vacancy rates.
Another trend is the fall in office rents in Spain. The average market rent decreased by 2.4% compared to 2019, mainly due to the drop in demand and the increase in supply. The competitive landscape of the commercial real estate market in Spain is divided, with both local and international players. Key players operating in the market include Merlin Properties, Through Celere, Kronos Venture Group, and Klapierre.
In conclusion, the commercial real estate market in Spain is expected to grow in the coming years, driven by factors such as demographic growth and investment interest in cities like Barcelona. However, the economic impact of the Covid pandemic may pose challenges for the market, including reduced demand for office space and falling rents. It is important for commercial real estate investors and stakeholders to closely monitor market trends and adapt their strategies accordingly.
Sources:
– Ocean Report
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– (Source 3)
