Madrid's commercial high street is filling up. The increase in tourism in the city, which will rise by 20% in 2023 compared to 2019, attracting more than seven million international tourists and generating revenues of 1.850 million euros, has driven the occupancy of commercial premises in Madrid's main thoroughfares to over 90%, according to the Retail 2023 Report prepared by Gesvalt and Aretail.
The report also notes that, according to INE data on the Retail Trade Index, the Community of Madrid leads retail sales with a growth of 13.3% from January to July 2023, three and a half points above the national average, representing 6% of the region's Gross Value Added.
In terms of occupancy of premises by specific streets, Fuencarral street reaches 100% occupancy in its 130 premises. Fashion and jewelry lead with 66.15%, followed by restaurants with 13.85%, cosmetics with 6.15%, services and home with 1.54% and 0.77% respectively, and the remaining 12.73% for other activities.
Serrano street shows an occupancy rate of 99.36% with only one available space out of 156. Here, fashion and jewelry account for 61.54%, services 13.46%, and restaurants 10.26%, followed by cosmetics and home with 1.92% and 0.64% respectively, and 11.54% for other sectors.
For its part, Preciados Street recorded a 95.65% occupancy rate, leaving only three of its 69 stores vacant. Fashion and jewelry predominate with 34.78%, followed closely by restaurants with 27.54%, services with 5.80%, cosmetics with 2.90%, and 24.64% for other sectors.
In Gran Vía, occupancy is 94.76%, with 10 premises available out of 191. Catering leads with 29.84%, followed by fashion and jewelry with 20.94%, services with 14.14%, cosmetics with 3.14%, and 23.56% for other purposes.
The Ortega y Gasset Street has an occupancy rate of 90%, with 36 of its 40 stores occupied. Fashion and jewelers account for 83.33%, services for 8.33%, and another 8.33% dedicated to other sectors.
Rents on the rise in Madrid's commercial hub
Rents vary significantly depending on the location and size of the premises. In Fuencarral, rents range from 60€/sqm to 75€/sqm for premises larger than 1,000 sqm, increasing as size decreases to 290€/sqm to 320€/sqm for those smaller than 100 sqm. Serrano has the highest rents for small premises, from 350€/sqm to 400€/sqm, dropping to 50€/sqm to 100€/sqm for those larger than 1,000 sqm. Preciados and Gran Vía show similar patterns, with variations depending on the stretch of street. Ortega y Gasset shows rents from 330€/sqm to 350€/sqm for the smallest, falling to 50€/sqm to 100€/sqm for those over 1,000 sqm.
The report concludes that the retail sector, as well as real estate in general, must prepare for the challenge posed by the expected population growth in Madrid, projected by the INE at more than one million people. This will require adaptations in occupancy and sales methods to meet the new population demands.