City Spotlight:
MÁLAGA
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The second biggest city in Andalusia and the sixth biggest city in Spain, its population has grown to around 600,000 people. For many, its expansion is no surprise – Málaga was recently ranked third in our global Executive Nomads Index. In 2023, Málaga was rated the best city in the world for expats, according to Forbes, and regularly ranks highly in surveys for its quality of life, amenities and climate.
While tourism is the city’s lifeblood, it’s also a centre of growing business importance – particularly for technology – with global giants such as Google and Oracle opening tech hubs. This is bringing international workers to the city and boosting the local economy, as well as growing local demand for new retail experiences.
A thriving retail location
Málaga has a buoyant retail landscape with big international brands that have been attracted to the city, alongside Spain’s domestic national retailers. The destination of choice has historically been Calle Marqués de Larios – which is the Oxford Street of Málaga and the epicentre of retail in the city,, making it one of the most expensive retail sq m in Spain. Large flagship stores sit alongside chic boutiques and the area is always abuzz with shoppers – including tourists, expats, locals and other visitors. One of the great strengths of the Calle Marqués de Larios is that it sits at the entrance to the pedestrian city centre, right in front of the port where cruise ships dock. Footfall, and customers willing to spend, is almost guaranteed.
It’s an exclusive locale with high demand and short availability.
Though occupation rates are high, units do become available from time to time. At Savills, we have advised clients on nine deals in or around Calle Larios in the last year, including Adidas and Spanish cosmetics giant Primor.
The current 100% occupancy in Larios is leading retailers demand to other attractive options in the city – most of them pedestrian too. Calle Nueva is a popular shopping street not far removed from Calle Larios and Plaza de la Constitución is another popular hub, both of which are at maximum occupancy levels. Alameda Principal and Calle San Juan are becoming the natural extension of the HS circuit in the city, expanding to the famous department store El Corte Inglés. With the support of our advisory team, Danish home décor brand Bolia have opened a flagship 700 sq m store over two floors in this expanding area – the company’s biggest store in EuropeIt’s a fantastic space and marks Bolia’s fifth outlet in Spain, after Barcelona, Madrid, Seville and Marbella.
A range of rental prices
In terms of rental prices, Málaga generally sits in the second tier – below Madrid and Barcelona. While rents will depend on the specific site, tenants can expect to pay around 112 euros per sq m per month, on average, in Calle Nueva – and approximately 100 euros in Plaza de la Constitución, while Alameda or the area next to El Corte Inglés present very competitive rents and footfall. Calle Larios, meanwhile, attracts a significant premium, with average rents in the region of 225 euros. This puts it not far off the rates currently being seen for prime retail locations in Madrid and Barcelona, which can sit at up to 250 euros.
Retail in Málaga is focused on open-air, metropolitan high street environments such as Calle Larios and Calle Nueva. Yet you can also find several shopping malls located mainly around the city’s edge and near to various luxury hotels. Probably the best-known mall is McArthurGlen’s designer outlet, close to the airport. These malls are another option for retailers to consider.
Food and beverage (F&B) is another thriving sector in the city. Restaurants, cafes and bars abound, catering for all tastes and budgets. Interest here is more from Spanish national operators than international brands. For example, we’ve recently helped top-tier Spanish group La Máquina close a deal for a location on Calle San Bernardo, in the adjacencies to Calle Larios.
A FOCUS FOR LUXURY BRANDS
The opportunities in the Málaga area don’t end at the city limits. Just 60km away is the smaller city of Marbella (population circa 130,000). The market here is high-end and a magnet for luxury brands from around the world. The Puerto Banús marina just south-west of Marbella is renowned as a ‘millionaire’s playground’ and is a focal point for luxury boutiques.
As such, Marbella is quite distinct from Málaga – an ecosystem of its own. As with Málaga, availability is a challenge, with vacancy rates usually only around 1-2%. But for those brands prepared to wait for the right opportunity, the rewards may be worth it. One of the strengths of the Marbella area is that, due to the balmy climate, its tourist season extends far beyond the summer months – stretching from April through to November.
Investor activity
With such a booming retail rental market in this stretch of southern Spain, there are also significant opportunities for investment groups and landlords. We recently advised a Spanish investment group on the purchase of multiple assets in Málaga – which will become a hotel, retail units and a parking lot. It’s not only domestic interest, either. We’ve also been seeing growing interest from Mexican and Latin American investors who are keen to take a stake in the city’s real estate.
Without doubt, Málaga and the surrounding area presents attractive opportunities for retailers and landlords alike. One of the great attractions of the area is simply the Spanish love of walking in the open air, enjoying the sun and indulging in some ‘retail therapy’. While ecommerce is growing, it is not as big in Spain as in other markets, and it feels like there will always be a premium on the in-store, high street retail experience.
Cross Border Senior Consultant, Retail High Street, Madrid
jorge.alonso-allende@savills.es
+34 667 64 76 97