Invest in a Commercial Real Estate Market

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The real estate market is not only based on your residential area, there is also the commercial part that can be very attractive for any investor because it offers many opportunities. Find out more about the commercial real estate market in Mallorca and what you should consider before investing in it. Don’t stop reading!

What is the commercial real estate market?

This facet of the real estate market is full of commercial properties, which generate income for rental concepts.

According to doraltimes.com, a newspaper in Doral, commercial real estate is divided into the following categories:

  1. Office buildings
  2. Commercial (premises or shopping centers)
  3. Industrial
  4. Multifamily
  5. Hospitality
  6. Developable vacant lots
  7. Special purpose
  8. Business opportunities

But that doesn’t mean that any of these properties cannot be residential.  So, we must have a clear vision of the use that a person wants to give to a building in order to establish its function.

What should be considered before investing in the commercial real estate market ?

1. Understand the market

As we mentioned earlier, knowing what kind of properties are commercial or residential is not so simple and this makes the process difficult.

It’s best to understand the market and have a good amount of fundamentals (legal implications, competition, permits, vacancies, rents, etc.) before considering making an investment.

Invest in a Commercial Real Estate Market

Especially in Mallorca, where the real estate market is so varied due to its high flow of tourists annually.

2. Approvals and jurisdictions

Take advantage of knowing the market and everything that implies investing in Mallorca to know what and how long the necessary general approvals take.

The time that an application will be taken to be approved depends on the city and its legislation.

It’s very important, since, this can cause a construction to be delayed while you get the appropriate permits, for example.

3. Have enough capital or get a good offer

In order to successfully invest in commercial real estate markets you need at least one of these two important things: sufficient / abundant capital or a good offer.

Capital is not so necessary if you can get a good offer. But in case you don’t and are concerned about high valuations, then your priority should be to find a source of capital that allows you the investment.

4. Consider demographics and trends

Commercial real estate depends a lot on where properties are located to be a productive and successful business.

We recommend studying all well-developed areas that can be considered a good investment.

In addition, you can also look at the trends for now. Which won’t be so much trouble in Mallorca because it has a great influx throughout the year for its prodigious location.

5. Study the impact of trends

Trends can be a double-edged sword. It’s important to understand the dynamics of how the type of property you select for a certain market works! 

You should also study the short and long term impact that this property will have in that area.

Nor can you stop thinking about the demand of consumers and tenants who use commercial property. Since it’s a very changing area in Mallorca and in this type of markets.

Visit Mallorca and don’t miss the opportunity to invest there 😉




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