The key factor in retail behavior year after year is consumption. You must quantify, measure, analyze and understand your evolution in order to predict trends and new consumer behaviors. In this way, we can focus our efforts on what interests us and optimize our assets. There are two key concepts: what brands look for and how much they can pay for it.
Before what, we must address the concept of omnichannel. The omnichannel is a reality in the openings of premises that surround us and arises from the need to adapt companies to a new digitally interconnected client to whom information comes through multiple channels and supports. The omnichannel integrates all these channels and channels, improving communication with the client.
The omnichannel applied to the world of Retail is summed up in a very clear way: to communicate better I need more area and a better distribution of square meters. Brands are currently looking for large spaces to exhibit and transmit what they are, but they also need a certain logistics component, and thus use the space as a collection point for customers.
To communicate better I need more area and a better distribution of square meters.
We saw these movements in 2014 and 2015 with the big fashion operators. At 2016, the interest of the classic medium-sized business customers began to settle in the downtown area (Leroy Merlin, Ikea, etc ...). In 2017 we see how the service sector follows this line. An example of this would be the banking sector that retakes its open plan in prime areas and opts for large-area assets (Caixa Bank only in 2017 has opened in Diagonal three flagship offices of more than 1.000m & sup2; each).
This trend has a backbone characteristic: operators are looking for large areas larger than 1.000m & sup2; To develop your brand concept. This makes the market polarize, making large and smaller stores more profitable than medium-sized stores (around 500-750m & sup2;).
In the 2018 we anticipate that this need of m & sup2; It is extended to sectors such as Automotive and Food & Beverage. Concepts such as Vapiano, Wagamama or Five Guys will now be able to compete with traditional brands in prime axes.
Let's move on to the essential question: How much is paid for them? The Barcelona market is in good health, the average price of commercial stores has increased by about 7%.
As it is obvious to know the market income is capital for any company but there are other concepts of equal importance when evaluating the implementation on an axis such as the minimum income of entry and maximum income of the axis which can guide you in the sales forecast .
The minimum entry rent is the minimum annual rent that an operator must pay to enter that street since there are no spaces (however small) of lower price. For example, in Rambla Catalunya this rent would be about € 50.000 / year.
The maximum income of the axis would be the maximum annual income that a brand could assume (regardless of the meters that are). In Rambla Catalunya the maximum income is currently € 500.000 / year.
These two concepts exist in all axes and are not born from the classic price per square meter of market reports, but come from other less obvious variables. Therefore, in the optimization analysis of any asset it will be key to know this data, we must know operator trends, know what number of operations have been closed in the range of my objective income, know the contractual conditions or morphological requirements, and that This way the analysis is real.
As regards investment, commercial premises continue to be a preferred asset in any portfolio due to their unbeatable relationship between profitability and liquidity. During this year it seemed that we were going to break the 3% profitability barrier in Barcelona but due to socio-political events it seems that we should wait a little longer. The Retail Business is not an exact science, but with the right information and doing a good sensitivity analysis, the risks are very controllable and the return is very high.
The average price of commercial premises has increased by around 7%.