New dose of reality in the digital retail and physical store binomial, that is, the phygital era. We have recently learned that sales and footfall in shopping centers have experienced an increase of 3.2% and 3.7%, respectively, in the first four months of 2024, compared to the same period of the previous year.
It is data from the Retail Index prepared by CBRE, based on data from 59 shopping centers managed by the Property Management area in Spain and Portugal.
In fact, in April, the occupancy of these assets reached 89.9%.
Increased consumption is driving real estate investment in retail
Average spending sets the trend
Catalonia has led the increase in sales with 6.1% and a 2.3% increase in footfall.
Paul Santos, Head of Retail Iberia at CBRE, explains that this notable difference between the increase in turnover and the number of visitors is due to the growth in average consumer spending in shopping centers.
The largest increase in the number of visitors was recorded in the shopping centers in southern Spain, with 7.9%, accompanied by a growth in sales of 3.8%. The shopping centers in the north of the country also saw increases in their turnover (2.7%), as did those in Madrid (2.3%) and the Central – Levante Zone (2.1%), although to a lesser extent.
By type, shopping centers with a large leisure component showed the greatest increases in sales, with 9.6%, and an increase in footfall of 8.8%. They are followed by urban centers, with increases of 6% in sales and 7.1% in the number of visitors.
Within department stores, the activities that recorded the greatest increases in turnover were specialty retail (perfumery, beauty, optical and pharmacy, telephone, bookstore, toys and gifts) with 9%, electronics with 7.6% and services with 6.7%.
In contrast, sports and leisure stores saw declines of 1.8% and 3.7%, respectively, compared to the same period last year.
During this period, rents have remained stable at 2023 levels, with no forecasts for notable variations at least for the next twelve months.
The boost of real estate investment in retail
These data show the reactivation of real estate investment in Spain in retail.
This real estate investment has been showing signs of reactivation for six months, and is expected to increase even more in the second half of 2024.
According to CBRE, moderate investment growth is expected, estimated between 5% and 10%, reaching approximately €12.5 billion.
Within the retail sector, there will be continued polarization between prime and non-prime assets, with strong locations driving rental growth and occupier demand.
According to CBRE, moderate investment growth is expected, estimated between 5% and 10%, reaching approximately €12.5 billion.
The physical store is the favorite among consumers
The physical establishment continues to be the preference of consumers, reflected in the transition to offline of more digital native brands.
Therefore, retailers continue to invest in physical stores, with a greater focus on prime locations.
On the other hand, prime rentals are expected to continue increasing, although at a more moderate pace, and market segmentation is anticipated according to the type of asset and its characteristics.
Factors such as the typology of space, location, technology and sustainability will determine the demand for these assets in Spain.
Likewise, according to CBRE’s Logistics Confidence Index, 84% of occupants would be willing to pay a higher rent for warehouses with sustainability certification.
Finally, 45% believe that artificial intelligence or process automation will have a great impact on the logistics segment in the coming years, highlighting route optimization.
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