Spain's high street retail market continues to show strong growth, driven by recovering consumer spending, robust tourism activity, and a shortage of available space in the most sought-after locations. This is highlighted in Cushman & Wakefield's High Street Spain 2026 report, which points to strong momentum across leasing activity, investment, and rental growth.
During the first quarter of 2026, 22 leasing transactions were completed in Madrid and Barcelona's Prime and Super Prime retail areas, representing a 73% increase compared to the same period a year earlier. Retail take-up reached 11,500 sq m, equivalent to half of all space leased during 2025, making it the strongest start to a year in the past two years.
This high level of activity is taking place against a backdrop of extremely limited availability. Vacancy rates stand at just 2.45% in Madrid and 2.49% in Barcelona, historically low levels that continue to put upward pressure on rents and restrict entry opportunities for new occupiers.
As a result, prime rents have reached record highs. Prime retail rents currently stand at €280/sq m/month on Serrano Street in Madrid and €290/sq m/month on Passeig de Gràcia in Barcelona, representing a 25% increase compared with the same period in 2022. This trend is expected to continue throughout the remainder of 2026 and into 2027.
Fashion Leads Demand
By sector, fashion remains the primary driver of the retail market, accounting for 48% of total take-up since 2023. It is followed by health and beauty at 18%, while food & beverage, sports, and services continue to maintain a stable presence across Spain's main retail destinations.
Retailers also continue to favour larger-format stores. Units exceeding 800 sq m represented approximately 55% of all lease transactions during the period analysed, reflecting brands' increasing focus on experiential retail concepts and highly visible flagship locations.
Investment Regains Momentum
The market is also showing a clear recovery from an investment perspective. In 2025, investment in high street retail assets reached €400 million, a 32% increase compared with the previous year. In the first months of 2026 alone, investment totalled €245 million, representing 45% growth and highlighting renewed investor appetite for this asset class.
At the same time, yields continue to compress, currently standing at approximately 3.6% in Madrid and 3.65% in Barcelona, driven by strong investor demand and limited availability of prime product.
Secondary Cities Gain Importance
Beyond Madrid and Barcelona, the report highlights an increasing geographic diversification of retail activity. Cities such as Valencia, Málaga, Seville, Bilbao, Palma de Mallorca, Zaragoza, and San Sebastián are establishing themselves as strategic markets for the expansion of both national and international retailers.
Growing tourism, improving local economic fundamentals, and the availability of commercial opportunities are attracting new brands and driving the repositioning of retail districts in these cities, making them an increasingly important component of retailers' expansion strategies.
"The outlook for the Spanish retail market remains very positive. We expect investment activity to maintain its growth trajectory throughout the remainder of the year, supported by strong consumer spending levels, continued tourism growth, and the interest of new international operators looking to enter or expand their presence in Spain. These factors, combined with the shortage of available space in the most sought-after locations, will continue to support both activity levels and the sector's attractiveness," said Domènec Casellas, Head of Retail Agency Spain at Cushman & Wakefield.
