The property market in Spain has proven remarkably resilient in 2024 in the face of a challenging economic backdrop. Between January and June, investment in the sector reached significant property investment figures of approximately €2.4 bn in the first half of 2024.
Investment in the Retail and Property Services Sector in Spain
Retail Sector Growth
In the first six months of 2024, among the different sectors, we note the investment in the retail segment, which, according to sector sources, stood at €1.3 bn, representing a significant increase compared to the same period in the previous year. This increase reflects a renewed investor interest in retail, driven by several significant transactions, particularly in Madrid, where more than 50% of deals have been signed in Q2 2024.
This dynamism in the retail sector may be attributed to a number of factors, including
- Changes in consumer habits. We are seeing a significant change in fashion spending in particular. Similarly, the hospitality and leisure industries are becoming agile and flexible enough to adapt to emerging trends and meet customer needs without losing sight of the future. In addition, the second-hand sector is experiencing a considerable boom eased by consumer-to-consumer platforms of the peer-to-peer economy.
- The importance of walk-in stores and bricks and mortar retailers has evolved beyond simply being a point of sale to become a core element in the omni-channel strategy and logistics of the sector.
Future Outlook for the Spanish Property Market
The Future of Retail
The outlook for the retail and property services sectors in Spain remains positive for the second half of 2024.
Despite previous challenges—such as high inflation impacting yields in 2023—and current challenges, the retail sector has grounds to look at the year ahead with optimism and to continue evolving in line with new trends.
Furthermore, Q2 has seen a positive trend in the property market, driven by an initial adjustment of interest rates that has stabilised returns. Hence, an increase in the volume of transactions in the last quarter of the year is expected.
The Profile of Investors in the Property Market
The type of property investors varies significantly depending on the sector. However, in Q2, institutional funds have been the most active, recording an investment volume of about €1 bn. This figure represents a volume close to 50% of the market share.
Family offices retain a strong presence and have been involved in a high number of deals, accounting for nearly 20% of total investment and a third of the number of transactions.
In addition, property companies and REITs have made significant investments, representing 18% of the quarterly volume, with an approximate investment of €407m.
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