This shopping malls Spaniards are leaving COVID-19 back but only in volume sales over 1.8 percent one of 2019’s. On the contrary, entrances to these properties remain below 14.9 percent those registered in the last year before the outbreak of the health crisis; according to the annual report of the Spanish Association of Shopping Centers and Parks AECC.
“The industry has fully recovered in sales to pre-pandemic figures, consumer confidence is strong with rising visitor spending. We continue to maintain our strength and have regained investor appetite. Investment has recovered and many recreational activities and restaurants are back. We are a very active industry with ongoing innovations and stronger sustainability policies,” summarizes Eduardo Ceballos, president of the Spanish Association of Shopping Centers and Parks, at the time the report was presented. [Citation: AECC annual report]
There are currently 577 shopping centers and parks in Spain with a gross leasable area of 16.6 million square meters. In the last 12 months, mentions include Caleido or Mirasierra Gallery in Madrid; Open Mall in Lanzarote; Nasas Nigran in Pontevedra; and Family Park in Castellón. [Citation: AECC annual report]
30 new projects are planned to be completed between this year and 2025. “Half are shopping malls and the other half are retail parks, measured by gross leasable area. By number of assets, seven malls and 23 parks are smaller,” explained Eduardo Ceballos, president of the Spanish Association of Shopping Centers and Parks. [Citation: AECC annual report]
paralyzed investments
In 2022 investment by funds, socimis or private investors in this segment reached 1,808 million euros, nearly double the figure from 2021. Institutional investments paused during the health crisis in 2020 and 2021, and the rise of ecommerce raised questions about the asset class’s future. [Citation: AECC annual report]
Last year the first deals began to close: the South African fund Lighthouse acquired Torrecárdenas Shopping Center from Bogaris for 172 million euros, and the French fund Frey bought Finestrelles Shopping Center for 127 million. Yet rising interest rates and investor pressure for profitability have slowed many sales processes, including Splau in Barcelona where German firm ECE is in talks with URW. [Citation: AECC annual report]
“After three years of falling investments, 38 operations were recorded in 2022. Eight asset conversion interventions involved 70 million euros of investment,” notes the association’s president. [Citation: AECC annual report]
Ceballos highlights a strong appetite for investments in traditional centers and retail parks. “The most dynamic category in recent years is retail parks. There are 84 in Spain, up from 68 in 2018. In addition to recovering faster from the pandemic, this sector has expanded with the most new projects,” he adds. [Citation: AECC annual report]
E-commerce is stagnant
E-commerce accounts for 10.6 percent of all retail purchases in Spain, compared with 14.5 percent in the European average. This data comes from CBRE and Euromonitor as compiled by AECC. He notes that the weight of e-commerce continues to grow, but Spain remains below the European average, higher than Italy yet lower than France or Germany and well below the UK. [Citation: AECC annual report]
The association president acknowledges some uncertainty after summer but says the impact on shopping center consumption is modest, while watching closely for potential future effects. While average sales per visitor remained on an upward trend, growth slowed compared with the pandemic months when shopping was more frequent. [Citation: AECC annual report]
During lockdown months, families built up savings that gradually diminished once restrictions eased. Spending patterns shifted accordingly: restaurant expenditure rose 37.1 percent versus 2021 but still fell 7.8 percent against 2019; spending on home-related goods rose 4.5 percent versus 2021 and is on track for a 25.1 percent increase versus 2019. [Citation: AECC annual report]
AECC emphasizes the sector’s economic and labor importance in Spain, supporting around 860,000 jobs and contributing 0.9 percent to national GDP and 10 percent of the service sector GDP. Shopping centers themselves contributed more than 12,363 million euros to Spain’s GDP. [Citation: AECC annual report]