Commercial Property in Spain: An Alternative Investment
Commercial real estate on the Costa del Sol offers an attractive alternative to residential property. With tourism driving strong demand for shops, restaurants and office spaces, well-located commercial premises can deliver higher yields than apartments or villas.
Types of Commercial Property
- Local comercial: A ground-floor retail unit, typically used for shops, cafes or small businesses. The most common commercial property type in Spain.
- Office space (oficina): Can be standalone units or floors within commercial buildings. Growing demand in Malaga's tech hub.
- Restaurant/bar premises: Includes kitchen extraction, commercial-grade utilities and often a terrace licence. Highly sought-after in tourist areas.
- Industrial units (nave industrial): Warehouses and workshops on industrial estates. Popular for logistics and storage businesses.
Prices and Yields
Commercial property prices vary widely by location and type:
- Small retail unit (50 to 100 sqm): 80,000 to 250,000 EUR
- Prime location shop (beachfront, town centre): 200,000 to 600,000 EUR
- Restaurant premises with licence: 150,000 to 500,000 EUR
- Office spaces: 100,000 to 400,000 EUR
Gross rental yields for commercial property typically range from 6 to 10%, significantly higher than the 4 to 6% you might expect from residential property. Prime tourist locations command even higher yields during peak season.
Key Differences from Residential
Commercial property purchases differ from residential in several important ways:
- VAT: Commercial property sales always carry 21% IVA (VAT), not the 7% ITP that applies to resale homes.
- Lease terms: Commercial leases in Spain are typically 5 years minimum, with the tenant having the right to extend. This gives landlords stability.
- Tenant improvements: Tenants usually pay for fitting out the space to their needs. This reduces your upfront investment.
- Licence requirements: Different business types require different licences (licencia de apertura). Restaurant premises need specific health and safety approvals.
Due Diligence Checklist
- Verify the property has a valid licencia de apertura for the intended use
- Check if the building community allows commercial activity (some residential buildings prohibit it)
- Confirm the property meets current accessibility regulations
- Review any existing lease agreements and tenant rights
- Check for outstanding debts or community fee arrears
Financing and Costs
Banks are generally more cautious with commercial mortgages. Expect to need a 40 to 50% deposit (compared to 30% for residential). Interest rates may be 0.5 to 1% higher. Total purchase costs including the 21% IVA make commercial property a larger upfront investment. Use our free calculator to estimate your total costs and understand the full financial picture before committing.