Investor interest in supermarkets in Spain continues. According to the report "Food distribution in Spain", prepared by the consultancy firm Savills, in the first half of 2024, investment in this sector reached 122 million euros, which represents 12% of total retail investment and more than half of the volume reached during the whole of 2023, which was 202 million euros.
The report also highlights a reduction in the volume transacted compared to the last two years, attributed to the scarcity of product available in the market. The main transactions have been led by Realty Income Corporation, which between 2021 and 2023 acquired several portfolios in sale & leaseback transactions from Carrefour. A notable transaction this year was by MDSR Investments, which acquired a portfolio of 22 supermarkets from AEW.
Salvador Gonzalez, national director of Retail Investment at Savills, says: "Food continues to be the most sought-after sector within the retail category due to its defensive nature. This year we will see some more high-volume deals, so we are likely to exceed last year's figures. We expect yields to adjust further as interest rates fall".
European sellers led the transactions with 65%, followed by Spanish sellers with 27%.
In terms of distribution by investor type during 2023, funds dominated the market, accounting for 69% of total investment, while private investors accounted for 20% and food&beverage operators for 11%. In terms of sellers, food companies dominated, accounting for almost 80% of the volume sold in sale & leaseback transactions, followed by funds (5%), private investors (8%) and socimis (3%).
By nationality, US buyer Realty Income Corporation accounted for almost 60% of the total investment volume, followed by Spanish (31%) and European (9%) investors. European sellers led the transactions with 65%, followed by Spanish sellers with 27%. Despite high investor interest, the lack of available product has resulted in lower transaction volumes compared to previous years.
Savills anticipates that supermarket chains will continue to expand their locations to penetrate other markets. To cope with sustained price increases and international uncertainty, they are adjusting some strategies and redoubling efforts to provide attractive and affordable offers to consumers.
