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Renting out commercial premises and offices in Malaga is more profitable than housing
Property

Renting out commercial premises and offices in Malaga is more profitable than housing

The high purchase price of real estate assets in the capital of the Costa del Sol means that their profit yield is in all cases below the Spanish average

Cristina Vallejo

Malaga

Wednesday, 9 October 2024, 13:18

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To calculate the profitability of a real estate asset it is necessary to compare the cost of its acquisition with the return that can be obtained by renting it out. So, in Malaga all housing, despite the high price levels reached by rentals, is not the most profitable type of property to hold. This is because the rents (the fifth highest in the country after Barcelona, Madrid, San Sebastian and the Balearic Islands, according to the latest data from Idealista) also correspond to very high purchase prices (also among the highest nationally: Malaga is the sixth most expensive province in Spain for home-buying, according to government statistics). Therefore, the profit yield for housing in the capital of the Costa del Sol, according to Idealista's calculations, is limited to 5.6%. Note, this is the average gross yield and does not take into account the costs associated with maintenance of the property.

5.6% is the gross profit yield from renting a property in Malaga city.

This is below the Spanish average of 7.2%

This average rate of return for owners of rental properties in Malaga is lower than that recorded in Spain as a whole (7.2%). The provincial city at the top of this ranking is Murcia (8.2%). Meanwhile, in Andalucía, the highest return is achieved in Huelva (7.4%), next is Jaen (7.2%) and then Almeria (6.9%).

The lowest profitability nationwide is to be had in San Sebastian: less than 4% because, although the rent is very high, the acquisition of the properties requires a very high spend.

For those still keen to invest in Malaga there are two real estate assets in the city with which a higher return can be obtained than with housing rentals. Firstly, commercial premises, which, when rented out, provide a return in the city of around 8%. However, once again, this figure is below the Spanish average of 9.7%. The most profitable commercial premises are those in Murcia and Girona, which yield more than 11%. In Andalucía, the only provincial capital in which rental of these types of properties gives a return of more than 10% is Huelva.

The second most profitable real estate assets in the capital of the Costa del Sol are offices, which give a return of 6.8%, in this case too they are still lower than the Spanish average (11.7%). It is also the case that the most profitable offices in Spain are located in Seville (14.2%). At the other extreme are two provincial capitals in the Basque country, San Sebastian and Bilbao, where the gross profit yield for renting out office space is barely around 6%.

4.7% is the return on renting a parking space in Malaga.

This is also below the national average (6%).

The report published on Tuesday by real estate portal Idealista also analyses the profitability provided by renting out parking spaces. In Malaga it is the real estate asset with the lowest return, only 4.7%, which compares poorly to the Spanish average of 6%, a figure that is equalled by Huelva, the Andalusian provincial capital where a parking space rental provides the highest return. Avila and Murcia are the Spanish cities with the highest profitability - 8.7% in both cases.

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