According to the Forcadell H2 2019 Retail Market report, e-commerce has remained as the main drive and guiding thread of the sector’s transformation.
Specialization has crossed over in all the segments in Retail, and especially in the luxury sales sector.
As a novelty, the purchase/sale market of retail premises has been reactivated, driven by small investors and the comeback of end users as buyers.
In 2018, Barcelona’s commercial fabric has experienced a trend towards specialization, and a reactivation of sales, especially by investors and certain end users. This has been possible due to the improvement of the economy, the price stability, the favourable mortgage conditions and the consolidation of retail sector in Barcelona. E-commerce has remained throughout 2018 as the main driver and guiding thread of the transformation of the sector, leading to new demands, formats and tendencies. Along the same line, the shopping experience is gaining increasing prominence in those businesses in which there is a real symbiosis between e-commerce and the physical store. Omnichannel retailing has given retail premises a new dimension in which the clients’ satisfaction and expectations, more hyperconnected, informed and demanding than ever, becomes increasingly more important.
The specialization trend has had a cross-sectional influence in all the retail sectors: from the restaurant & bars segment -the busiest in Barcelona-, to fashion, food & beverages and luxury, which is presenting extensive growth perspectives for the next fiscal years. The smaller brands, in their search to compete with large-scale operators are finding in the specialization of the quality of the product an ideal market niche as well as the differentiation value.
The flagship boom that began in 2016 in Barcelona has been gradually diminishing, and openings of this type of establishments have been decreasing in 2018, mainly due to the lack of available spaces in prime locations. On the other hand, brands that were located in industrial or retail parks maintain their interest to place themselves at large surface spaces in the centre of Barcelona, but continue to encounter the same handicap: the shortage of available large surface premises in prime locations.
Against all odds, e-commerce is serving as a driving force when it comes to sales in the physical store and as a dynamizer in all the lines of the retail sector. In addition, the scarce availability of premises in prime is causing on the one hand that rents maintain their upwards evolution and on the other, a continued reactivation of lines that until now were less profitable, a fact that has caused a remarkable reduction in the non-occupancy period.
The appetite of international funds for investment in prime locations is still very high, but the lack of available spaces in these commercial streets is limiting investment transactions. If in the whole of Barcelona of every 10 available premises, 4 are for sale and 6 for rent, when it comes to prime locations, the percentage of premises for sale is reduced to represent less than 20%.
Rent prices for retail premises in prime registered continued increases since 2013. Specifically, since the H1 2013 to the present time, prices increased up to 49%.Throughout the 2 past fiscal years the upward trend of rents started to moderate, and in the 2nd half-year the semester increase did not exceed 3%. Even so, the most commercial streets in Barcelona still lead the ranking of the highest ranking rents in all of Spain, headed by Portal de l’Àngel with €275/sqm/month.
Sale prices in prime locations in Barcelona have maintained a trend towards stability dating since H2 2017. In fact, the only variation that has been registered in H2 2018 has been a reduction of some of highest prices, which suggests, together with the forecast for a global economic slowdown, a trend of stability in the coming FYs. Just as in rent, av.Portal de l’Angel remains as the most expensive commercial street in Barcelona and in Spain, at €94,285/sqm.
The retail investment market continues presenting great dynamism, encouraged by the surge in e-commerce, the specialization trend in retail, the increase in small business sales, the new formats that are emerging and the positive approval that the new projects that appear in the market are having from retailers and consumers. A reflection of the good performance of the sector can be seen in the investment figures: at nationwide level, professional investment specialized in retail assets has controlled 22% of investment in 2018, which implies a volume over €4.200m. This is a record figure that surpasses the volume obtained the past 2 years (€4.000m annually).
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