Madrid High Street Monitor

Transcription

1 Madrid High Street Monitor December 2013

2 Economy GDP -GDP rose marginally (+0.1% q/q) in Q3 2013, as a result of higher consumer spending and investment. -Forecast (FUNCAS): +1.0% in 2014, increasing marginally to 1.4% p.a. in the period This is well below levels seen in past recoveries.

3 Annual % change CPI National Statistics Institute (INE) Economy Inflation -Headline CPI: -0.1% in October Core-inflation: +0.3% in October Food prices have been increasing steadily over the past year. -Inflation forecast (FUNCAS): +1.1% by end 2014; +1.4% p.a. during the period

4 Economy Retail sales -Retail sales improved during the summer months (partly due to increased tourist spending), although dipped in autumn. -Food sales stable throughout the recession, slight dip following the summer months.

5 High street survey Market activity -Retailers have been active over the past quarter, with new openings/relocations coming from a wide range including fast fashion, luxury brands, household goods and supermarkets. -New openings not confined to Madrid, but in regional capitals as well. -Non-performing units of otherwise successful brands (e.g. Zara) have closed. Expanding retailers: openings in Q3-Q Store closures/market leavers in Q3-Q Brand Location Brand Location Asics C/ Alcalá 44 (Madrid) Angel Schlesser Granada Bershka C/ Colon (Valencia) Blanco 36 locations throughout Spain Bricor Valencia C&A 21 locations throughout Spain Calzedonia C/ Preciados (Madrid) Charanga Locations throughout Spain Camper C/ Serrano (Madrid) Decathlon Calatayud Carpisa Las Palmas de Gran Canaria Forever 21 CC La Maquinista (Barcelona) Carrefour Express Sevilla, Pozuelo de Alarcon Karen Millen Madrid Conforama Alcala de Henares Lanidor Madrid, Barcelona, Valencia Decathlon Ciudad Real Oscar de la Renta C/ Claudio Coello 17 (Madrid) Deichmann Huelva, Sevilla, Vitoria Pepe Jeans C/ Hermosilla (Madrid) Double Agent CC La Maquinista (Barcelona) Primark Dolce Vita Equivalenza C/Princesa 82 (Madrid) - 400th store in 2 yrs. Zara CC Corredor, CC Getafe 3, CC Plaza Eboli (Madrid) Forecast Huelva, Marbella, Orihuela Gucci CC La Roca Village (Barcelona) H&M Bilbao Longchamp Paseo de Gracia 86 (Barcelona) Luis Vuitton C/ Serrano 66 (Madrid) Mango Bilbao Max Mara Gran Via (Bilbao) Media Markt El Ferrol Michael Kors Valencia New Balance Rambla Cataluña (Barcelona) Nike C/ Serrano (Madrid), Valladolid Pepe Jeans C/ Claudio Coello (Madrid) Prada Paseo de Gracia 88 (Barcelona) Primark CC Gran Plaza (Almeria) Quiksilver Pza San Miquel (Barcelona) Springfield Malaga Swatch C/ Preciados 24 (Madrid) Valentino Marbella Vans Bilbao Source:

6 High Street survey Vacancy -Vacancy increased sharply in Serrano, while it fell in Gran Via and Preciados. In Goya and Ortega y Gasset void were unchanged. -Gran Via has seen climbing vacancy over the past year.

7 Madrid high street rental value forecasts GDP (%pa) Rental value change (%pa) IMF; (December 2013) Outlook and forecasts -Spanish economy continues to face structural problems / deleveraging; very weak recovery in consumer spending and investment in 2014, as a result of relaxed austerity measures/ecb assistance. -Expect continued retailer weakness / declining margins / high churn in Average prime rental values to decline in 2014 (-1%). -Modest increases in values in (3.3% C.A.G.R.) -Initial yields for prime units remains low (5.75%) with secondary yields in excess of 7.75%.

8 Sebastian Söderlund December 2013 Important disclaimer: This document has been prepared for discussion purposes with prospective investors and does not constitute an offer or solicitation, nor is it the basis for any contract, for the purchase or sale of any investment. Analysis and conclusions express the views of the author and may be subject to change without notice. The value of investments may fall as well as rise and past performance is not necessarily indicative of future returns, nor are target returns guaranteed. The information and data used in this document has been sourced from a number of recognised industry providers. Details of these source are available on request. Whilst facts have been rigorously checked, the author can take no responsibility for any damage or loss suffered as a result of any inadvertent inaccuracy within this document. Information contained herein should not, in whole or part, be published, reproduced or referred to without prior approval. Any such reproduction should be credited to the author.