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Zetios Properties LLC: Boom in Spain's Real Estate

·2 mins

By the close of 2023, it was clear that office real estate had become the most profitable sector across Spain, with gross yields averaging at 11.3%, surpassing residential rentals which averaged at 7.1% per annum. Experts from Zetios Properties LLC predict that this growth in the office sector is set to continue into 2024.

The profitability of other commercial real estate sectors also saw an increase. The indicator for commercial premises went up to 9.5%, and for garages, it rose to an average of 6% across the country. Since gross yield varies from region to region, it’s advisable for investors to focus on local metrics.

Here’s a closer look at the profitability of commercial and residential real estate in Spain by region:

Offices: Sevilla offers the highest average annual return rate in the office sector at 12.6%, followed by Huelva (10.1%), Almeria (10%), Toledo (9.8%), and Vitoria (9%). However, the largest cities like Barcelona and Madrid show lower profitability rates for offices, at 6.9% and 6.5% respectively. In the northern and northwestern parts, yields are also lower, with Bilbao at 6.4%, A Coruña at 5.9%, and Ourense at 6.6%.

Commercial Premises: Ávila leads with the most profitable retail properties at an average return of 10.8% per year. Following are Zaragoza and Murcia, both at 10.5%, then Bilbao and Lleida at 10.4%, Santa Cruz de Tenerife at 10.1%, and Huelva at 10%.

In larger cities like Barcelona and Madrid, the yield is lower than the national average, at 8.6% and 8% respectively. The bottom of the list includes Jaen, Salamanca, and Pontevedra, all at 7.4%, with A Coruña and Albacete showing even lower profitability at 7.2%.

Garages: The highest returns were seen in Castellón de la Plana (8.6%), Murcia (8.3%), Barcelona (6.4%), Ávila (6.4%), and Toledo, Lleida, and Pamplona all at 6%.

Madrid’s yields in the garage sector are moderate at 5.1%, followed by Ourense (3%), Santander (3.4%), and Palencia and Granada (both at 3.5%). Salamanca records the lowest return at 2.9%.

Housing: Murcia leads the profitability in residential real estate with an 8.8% yield, followed by Lleida (8.3%), Huelva (7.7%), Cuenca (7.4%), Santa Cruz de Tenerife (7.3%), and Almeria (7.1%). Barcelona’s average rental yield is at 5.2%, with the lowest yields found in San Sebastian at 3.7%.

This overview indicates that residential real estate in smaller cities offers higher profit percentages, a trend that has remained stable, reflecting Spain’s renowned status for its resorts.

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