How to start the process of purchasing commercial property in Spain?
Determining the type of commercial real estate and, accordingly, the level of profitability of your assets. Depending on the type of investment and the form of interaction between owners, commercial real estate of 2 types is distinguished:
with a tenant (the so-called ready-made business);
without a tenant (to create your own business).
Commercial property with a tenant
This type includes:
commercial premises in the retail sector in major cities of Spain, such as Barcelona, Madrid, Alicante;
hotels in the resort regions of Spain (Costa Brava and Costa Dorada in Catalonia, as well as the Costa del Sol, the province of Alicante and the Balearic Islands);
office space in big cities such as Barcelona and Madrid;
catering points, bars, restaurants, banquet halls in various regions of Spain;
industrial areas, warehouses, production facilities, land plots for the agricultural sector in different regions of Spain, depending on the type of activity;
tourist apartments for rent in big cities or resort regions with developed infrastructure - for permanent life, recreation and golf tourism in Madrid, Barcelona, on the Costa Blanca and Murcia.
The profitability of such assets averages 3.5–6.5% per year, depending on the city, region and the level of its economic development.
Commercial real estate without a tenant to create your own profitable business
This type includes:
shops, offices, beauty salons, entertainment and recreation centers, cafes or restaurants in major cities (Barcelona, Madrid, Valencia, Alicante) or promising regions of Spain, such as the Costa Blanca, which is currently the third most developed in Spain infrastructure and consumer demand, both among the Spaniards themselves and among foreign investors;
hotels, inns, small art hotels and boutique hotels in various of the most popular regions of Spain;
land plots for the construction of a hotel, commercial center or industrial premises for subsequent own management or long-term lease by large network companies;
production facilities, factories, factories, various farms and wineries, agricultural land for the cultivation of certain crops.
The return on such assets averages 6.5% –12% euros per year, depending on the region and the degree of its economic readiness. Also, in addition to the annual profitability of this option, the capitalization of the invested funds grows as the region and the project itself develop.
Both investment options can be extremely successful, which is greatly facilitated by the level of economic development of Spain, its current economic and political stability and, as a consequence, the high standard of living of the population.
Why invest in real estate in Spain
This country will always be at its peak. It is not surprising that many foreign investors choose it as a place to invest their capital. They are attracted not only by the wonderful Mediterranean climate, but also by the investment protection guaranteed by the norms of the European legal system. Practice shows that the capital invested here is not only reliably preserved, but also significantly increased.
Of course, deciding on such a serious step, you need to carefully study the market, weigh all possible options and enlist the support of experienced experts. Ideally, professionals who have lived in Spain for a long time, who know the specifics of each region, can provide you with high-level legal and financial support, should work with you.
What is the main mistake of potential investors?
Contact several companies at once and wait for the most attractive offers throughout Spain to be sent to you by e-mail, in order to remotely select the most suitable one and come for viewing. Based on my own experience, I can say for sure that such a scheme does not work.
Firstly, because buying commercial real estate is a much more complicated process than buying, for example, an apartment to move your family. Advertisements for the sale of residential premises are published in all available sources, but the database of commercial investment objects is most often classified information.
A good commercial asset is a kind of gold reserve of a family or an entrepreneurial group, and it is sold in the event that the owner either does not have enough money for circulation, or he transfers capital to a new asset, more expensive and promising. That is why not all commercial properties are directly accessible online, and offers for the sale of some of them, usually the most profitable and in demand for investment, are not published at all. These properties do not need advertising, are sold quickly, and most often these deals are trusted by knowledgeable local professionals.
Secondly, this is the case when quantity does not grow into quality. If several companies are involved in you at once, there is a high probability of incompetence and rash decisions.
Investments in real estate in Spain. Where to begin?
Estimate the size of your investment and select an approximate region. Of course, each case is individual, but in general I would speak either about buying commercial real estate in an already developed and developed region, where you are provided with a constant flow of consumers, or about investing in a promising new region.
Relatively speaking, you can buy a ready-made business in Barcelona, Marbella, Madrid or Valencia (a shop with a tenant, a hotel with a management company, or a restaurant that has been operating for many years) and receive an income of 4.5-6.5% per annum or go to another way - to invest in a commercial building under construction, for example, in the province of Alicante. Purchase a land plot, build a hotel, retail space for shops and offices, or build your own catering outlet, in order to then find a tenant or sell the object itself with a profitable capitalization of your investment - usually plus 25-30% of the total investment. The Spaniards themselves prefer the second scenario: they sell their commercial real estate with a guaranteed rent of 5-6% per annum, in order to then invest in projects that are even more promising for investment. As the saying goes, money makes money!
How do we work with investors?
Over the years, our company has developed the following scheme for relationships with potential buyers of commercial real estate:
initial study of the available offers on the website of our company, analysis of the difference in the purchase of various types of commercial real estate, as well as the price range and location of the object;
consultation with a specialist of the company on the topic of finding and acquiring an asset in Spain;
consultation with a company specialist on the transaction registration procedure;
consultation with a specialist of the company about opening an account in a Spanish bank and legal transfer of funds;
a personal meeting in Spain with a specialist of the company to find out all the necessary parameters, build a legal form of acquisition, budget for the purchase, attract a loan, legalize the relationship and then view the commercial real estate objects themselves.
There are clearly established rules for paying a realtor's fee in Spain. Since not all owners of commercial real estate (and especially the most profitable assets for investment in big cities, such as Barcelona or Madrid) pay a commission for intermediary services, then, as a rule, a fee of 3-5% is paid by the buyer whose interests are represented realtor. If the buyer needs an economic study or examination of the object, then he also pays for these services to third companies that are licensed specialists in this field.
In conclusion, I want to emphasize that the selection of commercial real estate is not an easy question, and therefore I strongly recommend entrusting it to qualified specialists with extensive experience in this area. Take your time with the choice - the experts who will accompany you throughout the entire transaction should inspire your complete confidence.
In turn, it is better for a potential investor to play openly, to speak frankly about his wishes and opportunities. All this will allow you to invest your capital in the most profitable way and get a profit on your investment for many years.
