October 2015
T H E T R I U VA N E W S L E T T E R
INVESTMENT FOCUS
HIGHSTREET SPAIN
Spanish retail
back on
investors‘ radar
Above-average
prime yields
and rising rents
Late nights, long
opening hours and clever
e-commerce solutions
TRIUVA / Compass
The analysis of the crisis-resistant high street locations
in Spanish centres is positive. The rapid recovery of
the Spanish economy and growing visitor numbers
indicate rents are set to rise. From an investment
perspective, prime yields are above-average compared
with the international peer group.
TRIUVA, 17. September 2015, Frankfurt am Main
Kennzahlen der europäischen Top-Shopping Destinationen /
Key figures for European top retail locations Q2 2015
Key figures/
City
Barcelona
Madrid
Rome
Munich
Paris
London
Prime rent in
EUR/m2/year
2.580
2.580
3.000
4.020
7.600
7.226
Prime yield
4.5%
4.5%
4.0%
3.6%
3.0%
2.25%
67.200
67.200
75.000
122.000
253.500
290.000
Capital value in
EUR/m2
Source: TRIUVA Research
Spain‘s
quick
turnaround
Sentiment among private households and retailers
2014. Further tax rises are not anticipated. „Panic
is significantly higher than prior to the crisis. The
saving“ has stopped and consumers are gradually
main reason for this is the employment market.
catching up with the purchases they had long
Thanks to reform processes, the flexibilisation of the postponed. In addition, despite a downturn in the
employment market and, ultimately, the return of a number of visitors from Russia, the tourism
competitive economy, employment has increased by industry hit a record high of 65 million visitors
/3
almost 1 millionder
or more
than 5 % Haushalte
since March undinder
2014.Einzelhändler in Spanien /
Stimmung
privaten
TRIUVA, 17. September 2015, Frankfurt am Main
Quelle: TRIUVA Research 2015
Sentiment among private households and retailers in Spain
20
langfristiger Durchschnitt = 100
10
0
-10
-20
-30
-40
-50
'97
'98
'99
'00
'01
'02
'03
'04
'05
consumers
Konsumenten
'06
'07
'08
'09
'10
'11
'12
'13
'14
'15
retailers
Einzelhändler
Source: European Commission
Quelle: Europäische Kommission
Strong
demand
for space
despite
crisis
www.triuva.com
The extremely large and prosperous catchment
areas of the high street locations in Barcelona and
Madrid make them the „natural“ starting points for
the expansion strategies of all major international
and Spanish chains, which continued to believe in
the prospects of the country‘s top locations even
during the crisis. Although private consumption in
Spain fell by 11% between 2007 and 2013, retailers
like Inditex (e.g. Zara, Pull&Bear) and H&M
pressed ahead with their expansion. Hugo Boss also
/4
leased two stores in Madrid in 2009 and 2010. The
result: stable prime rents even during „la crisis“.
However, the high level of demand among retailers
can be attributed not only to their confidence in the
ability of the Spanish economy to push through the
necessary reforms, but also to the crisis-resistant
popularity of Spain as a holiday destination. For
example, the number of overnight stays in Barcelona increased by 41% between the end of 2007 and
mid-2015.
Spitzenmieten und verfügbares Einkommen /
Compass / TRIUVA
Prime rents and disposable income
Real disposable income in EUR 1,000/head
Prime rents in Madrid in EUR 1,000 / m² / year
3,5
25
3,0
23
2,5
2,0
„La Crisis“
1,5
21
Recovery (forecast)
1,0
19
0,5
0,0
'97
'99
'01
'03
'05
'07
'09
Prime rents Madrid
axis)
Spitzenmiete
MadridHighstreet
HighstreetRetail
Retail(left-hand
(linke Achse)
'11
'13
'15
'17
17
'19
Real disposable
income
(right-hand
axis)
Reales
verfügbares
Einkommen
(rechte
Achse)
Source: OECD, TRIUVA Research
/5
Quelle: OECD, TRIUVA Research
Above-average prime yields, the prospect of rising
initial yields and the defensive characteristics of the
market have attracted investors from around the
world. Retail property worth around EUR 3.5
Purchasing
power is
returning to
above
pre-crisis
levels
Attractive
pricing
billion was sold in Spain in 2014, EUR 0.5 billion
more than in the previous record year of 2006. The
transaction volume in the first half of the current
year was around EUR 1 billion.
TRIUVA, 17. September 2015, Frankfurt am Main
Mietprognose 2015-2019 europäische Top-Shopping-Destinationen /
Prime yields and rental forecast 2015-2019
6
Rental growth forecast (in % p.a.)
Barcelona 5
Paris London 4
Munich 3
2
2
Rome 3
Madrid 4
5
Prime yields Q2 2015 (in %)
Source: TRIUVA Research
/7
Quelle: TRIUVA Research
In addition to a strong macroeconomic outlook, Spain‘s
bottom-up analysis is a positive one:
> Stores in the country‘s pedestrianised areas are
open from 10 a.m. to 10 p.m., including on
Sundays and public holidays. Some even stay
open until 2 a.m. during events such as the
„Noche Blanco“, which attracts around a million
visitors.
> Prime locations in Madrid are enjoying further
appreciation thanks to urban development
measures such as the widening of pavements on
Calle Serrano and the construction of a large
underground car park.
> Physical retailers have succeeded in harnessing
the growing importance of e-commerce.
The „in-store pick-up“ model, where customers
order goods online and pick them up in-store,
is becoming increasingly popular in Spain.
Bottom-up
analysis
positive
for prime
locations
www.triuva.com
TRIUVA / Compass
TRIUVA
Highstreet
Investment
in Madrid
Adress
Madrid - Calle de Preciados 4
Closing
February 2015
Rental area Ca. 2.400 m²
Year
Renovation 2006/2007
> Off-market opportunity in leading retail location
in Madrid
> Fully let to the Spanish fashion company „Sfera“,
a subsidiary of El Corte Inglés
> I deal location for retailers in high street locations
thanks to a busy corner location in immediate
proximity to the „Puerta del Sol“ and strong
retailers such as Apple
„Madrid is a highly localised investment market in
which off-market transactions and networks are
extremely important. From a rental market perspective,
many international retailers are not yet represented
with a flagship store in prime locations, such as Calle de
Preciados, despite intensive searching.
Being successful in markets like Madrid and Barcelona
requires a long-standing local presence and the ability to
‚speak the language‘ of market participants. Off-market
approaches are often more promising and more
commonplace than in other European markets.“
Maria Laguna Coca / Director / Asset Management Europe / TRIUVA Kapitalverwaltungsgesellschaft mbH Sucursal en España
Contact us:
TRIUVA
Kapitalverwaltungsgesellschaft mbH
Dr. Georg Pfleiderer
Portfolio Management & Operations |
Research
T +49 69 643505-1534
[email protected]
www.triuva.com
THE SQUAIRE 18 / Am Flughafen
60549 Frankfurt / Germany
www.triuva.com
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