Spain Sees Readjustment in Retail Pipeline

MADRID-Spanish retail property developers have reacted quickly to the global downturn, cutting project volume in 2009 from the original forecast of 1.1 million square meters to an end figure of 360,000 square meters. As a result, rents should rise when the market begins to recover, says realtor Savills.

Of new retail development in 2009, which followed a record delivery of 1.1-million square meters new retail space in 2008, the highest proportion at 33% comprised small shopping centers followed by retail warehouse space at 29%. A further dip in the development pipeline is anticipated in 2010 as many Spanish developers are delaying projects as they expect a recovery in retail demand and financing facilities in 2011. Development activity is expected from 2011 onwards with many developers picking up on previously postponed schemes.