Increased Spain Rental Demand Raises Yields to 7,1%


Due to the strengthening of rental demand, the profitability of Spain’s rental housing increased from 5.9% to 7.1% between July and September as compared to the previous year. Buying a shop for rental in Spain offers a gross return of 8.3%, a bit more than offices which offer a yield of 7.7%.

According to the study by Idealista, which compares the sale and rental prices of different real estate products to calculate their gross profitability, commercial real estate remains the most profitable investment. Buying a shop in Spain to rent offers a gross profitability of 8.3%, compared to the 7.5% from last year. Offices offer a yield of 7.7% (a year ago it was 6.8%) and as for garages profitability has held at 5% compared to 4.6% 12 months ago.

Profitability of Spanish Housing

Among Spain’s major cities, Las Palmas de Gran Canaria is the most profitable, with 8%., followed by Lleida (7.5%), Santa Cruz de Tenerife (7%) and Alicante (6.7%). The profitability in Barcelona is 5.1%, which is lower than that of Madrid (5.8%).

The lowest yields in Spain are obtained by homeowners in San Sebastian (4%), A Coruña (4.1%) and Ourense (4.2%). Zamora is at 4.6%.

Profitability of Commercial Premises in Spain

Shops are the most profitable product in most of Spain’s major cities. The highest return is obtained in Córdoba and Zaragoza, with rates of 9.2% and 9% respectively. They are followed by Santander (8.8%), Malaga (8.7%) and Santa Cruz de Tenerife (8.7%). In Barcelona the rate is 8.5%, while in Madrid it remains at 7.9%.

Palencia offers the least attractive return for investors (only 5.3% profitability), followed by Castellón (5.7%) and A Coruña (6.1%).

Profitability of Offices in Spain

The offices of Malaga offer the best return among the major cities, with a gross return of 7.3%, followed by Zaragoza (7.2%), Santa Cruz de Tenerife (7%), Oviedo and Cordoba (6.9% in both cases). In Madrid the profitability amounts to 6.3%, while in Barcelona it drops to 6%.

On the opposite end we have A Coruña (4.6%), Valencia (5.3%), Bilbao and Santander (5.4% in both cases). The market for renting offices is not as uniform as other products, so it is impossible to obtain statistical data for more than half of Spanish major cities.

Profitability of Garages in Spain

Garages are, on the other hand, the least profitable product for the investor in many cities. The highest profitability is offered by Las Palmas de Gran Canaria (8.3%), followed by Palma (7.7%), Girona (5.7%) and Santa Cruz de Tenerife (5.4%).

The city with the least profitable garages is Salamanca, with a measly 2.6%, followed by A Coruña (2.8%), Vitoria (3%) and Oviedo, with 3.1%. Madrid offers 3.2% and Barcelona 3.3%.

Article: Idealista, Image: Source