When it comes to investing in prime commercial real estate in Spain, there is no limit on the options available. The famous Serrano Street in Madrid or the Portal del Angel in Barcelona are well worth mentioning, however, there is none more attractive and with as much growth potential as Paseo de Gracia, a street that has earned the recognition of being the most expensive commercial street in Spain, as reflected in the report “Main Streets Across the World 2022”, published by the real estate company Cushman & Wakefield.
This versatile shopping, office and residential street, famous for its modernist architecture and the presence of emblematic buildings such as Casa Batlló and La Pedrera, has become in recent years a street of reference for the luxury sector, with the presence of first class hotels such as the Mandarin Oriental, or shops ranging from fashion and luxury accessories such as Hermès and Louis Vuitton, to the fine jewellery of Van Cleef & Arpels, as well as the more popular clothing stores Zara and Mango, located closer to Plaza Cataluña.
The cost of rent per square metre in Paseo de Gracia rose to 2,677 euros per year in 2022 according to the Cushman and Wakefield report, which is still 16% lower than the pre-pandemic figures. This is still a far cry from the high streets of Italy or France where the annual rent per square metre in Milan’s Via Montenapoleone amounts to 14,547 euros, or the Champs Élysées in Paris, with a figure of 11,069 euros.
Although it could be argued that, in terms of the standard of establishments and architectural appeal, Paseo de Gracia is on a par with the main European streets, it still ranks 31st in the European ranking, surpassed by arguably lesser-known streets such as Grafton Street in Dublin, or Parizska Street in Prague.
According to the Ministry of Enterprise and Employment of the Generalitat de Catalunya, a total of 14.9 million tourists visited Catalonia in 2022, spending a total of 16,659 million euros. These tourists are the main shoppers at the luxury shops on Paseo de Gracia, where they frequently form long lines to experience the tourist attraction of shopping on the famous street.
This boom in tourism is driving the opening of numerous new shops on Paseo de Gracia, recently attracting sectors such as fine jewellery, which has made a strong entrance with Van Cleef & Arpels and Tiffany & Co. or the growth of the luxury watch sector, led by the family company Rabat, and the opening of shops of brands such as Rolex or Hublot, which will soon open its new boutique at number 78 on Paseo de Gracia, thus giving way to an opportunity for more luxury watch brands to follow suit, a phenomenon that has been seen in New Bond Street in London, where the price per square meter per year is 14,346 euros.
If the trend set by the main European avenues continues, and Barcelona continues to establish itself as a destination for the luxury buyer, it would not be surprising to see a rapid increase in the price levels for renting premises, caused by the fierce competition for available premises on the street, an area in which almost all brands want to be present.
The growth of Paseo de Gracia over the last 20 years has been fascinating, but it is still a long way from reaching its potential to be one of the world’s leading thoroughfares in terms of price, as it boasts having everything necessary to be one of the world’s leading thoroughfares in terms of architecture, culture and climate.
Oscar Vilá
Vilá Abogados
For more information, please contact:
18th August 2023
