The big retailers such as Mango, H&M as well as those from the Inditex Group are using the crisis to renegotiate rental agreements of their stores. Mango has confirmed that in the current times of crisis, it has already achieved reductions in rent from 20-25% or more.
In Barcelona, prime location rental prices oscillated last year between 70 euros the square meter on Avenida Diagonal to 325 euros the square meter on Portal de l’Angel according to a study by the expansion business Ascana.
Several of these big retailers have expressed their concern at some of the outrageous rental prices in Barcelona. According to Mango’s general director: “Rental prices cannot be over 35% of a store’s revenue” which unveils some of the speculative pricing engaged in by property owners over the past few years.
Greg Schellhammer business broker and author of the bestseller: Survive the Crisis in Spain says: “The conditions in the market are given for buyers and tenants to renegotiate their lease agreements and I encourage everyone to do so” it appears property owners have been too eager to raise the price of rents over the past years to take advantage of the huge demand. “Fact is, the abuse and greed is what caused the crash that Spain faces today, and the only way to survive it is by coming back to the ground”.
Monica Manguillot, director of the commercial real estate department at Busquets & Galvez says: “Today the landlords are responding well [to the demands of existing tenants] because they want to keep them and know that if they press too hard, then the tenants will have to close shop and leave.”
The Spanish property market has been hit hard over the past months and without a doubt, the trend looks like it will continue for quite some time.