Buying a Commercial Property on the Costa del Sol

This guide was written by Manzanares Abogados S.L. (info@manzanaresinternational.com) in collaboration with Guides.Global (office@guides.global).

It was written on 15 June 2016. The law and practice in Spain change all the time. Our guides are updated as frequently as possible - typically every three years - but may be out of date.

Our guides are prepared by professionals from many countries. They are, of necessity, both brief and general and can take no account of your personal circumstances. They are intended to be a good introduction to the subject BUT ARE NO SUBSTITUTE FOR PROPER PROFESSIONAL ADVICE, which our contributors will usually be happy to provide upon request.

The advice and opinions contained in the guides are those of the author and are not necessarily those of Guides.Global.

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The scope of this guide

This guide deals with the extra things that you will need to take into account when buying commercial property in Spain. By commercial property, we mean things such as offices, shops, bars, restaurants and warehouses.

It describes, in particular, how to buy a commercial property in the area of Andalusia/Andalucía – which contains the Costa del Sol. See a map here. Please note that certain aspects of the law in Spain vary from one "autonomous community" (comunidad autónoma) lightbulb image - click here for more information on this subject to another.

For more in-depth information about the process of buying a property in Spain, please read our Guide to Buying a Resale Property on the Costa del Sol.


Increasing numbers of foreigners are buying commercial property on the Costa del Sol. This is sometimes as part of their plan to open a business in Spain and it is sometimes as a straightforward investment.

Buying commercial property on the Costa del Sol for your own use

Buying commercial property can be a little more complicated than buying residential property.

Should you buy or rent a commercial property on the Costa del Sol?

Advantages of buying

Disadvantages of buying

Probably the most significant disadvantage of buying property is inflexibility. If you want your business to double in size quickly it will be much more difficult (and expensive) selling your property and buying another than it would be finding another place to rent.

The advantages and disadvantages of renting are the flipside of the advantages and disadvantages of buying!

What kind of premises should you buy?


fish restaurant on the beachLocation is as important for commercial buildings as it is for residential buildings: possibly more so. The price you will pay for the building can vary dramatically depending on its location. For example, a shop on a main shopping street or beach-front location of Marbella can be five times as expensive as a shop in a second- or third-level location.

Do you have a requirement to be in a particular place? If not, you can save a lot of money by choosing a place only a few hundred metres away from the prime location - and often get the side benefits of easier access and plenty of available parking.

Finding the premises

Most of the larger estate agency firms on the Costa del Sol deal with commercial as well as residential property.

Legal steps and due diligence

A contract for the purchase of commercial property is likely to be more complex than the contract for the purchase of a house and so, unless you are very experienced and your Spanish is fluent, you would be foolish not to use a lawyer to assist you.

There are a number of steps that will need to be taken before you sign a contract:

Raising the money

As already indicated, you are likely to need to find at least 20% and probably 30% of the price of the property from your own resources. You will also need to find all of the cost of improvements, repairs and redecoration and the legal and other fees involved in buying the property.

If you are new to Spain - for example, if you are moving to Spain for the purposes of setting up a business - finding a bank to lend to you can be difficult to the point of impossible. See below.

The legal fees and taxes payable will depend upon its price, size, type and location. Your lawyer will be able to give you an estimate early on in the process.

fish restaurant on the beachMost people will seek to obtain a mortgage on their commercial property.

Although up to 80% of the price is available by way of mortgage, foreigners will seldom be able to negotiate more than 70% - especially if they've only recently arrived in Spain. If you have only just arrived to the Costa del Sol and have little or no experience in this type of business, you will probably not be able to obtain a mortgage at all.

Mortgages on commercial properties are usually from 10-20 years in duration. The norm is about 15 years.

To be granted a mortgage you will have to provide extensive details about yourself (even if the property is being bought through a limited company) and you will have to produce a business plan showing that you can afford to repay the mortgage and your accounts - typically for the last three years - showing the way your business has performed.

Until the crash of 2007, banks were prepared to take a flexible approach to people who had only recently arrived in Spain but who had comparable experience with businesses elsewhere. This is now less common but there are still situations inwhich a bank will lend you money to buy a commercial property in Spain even if your business is new. Expect to be able to borrow well below 70% of the cost of the building in these circumstances. Negotiating such a loan can be seen as the first test of your negotiating powers in Spain!

Which is cheaper - buying or renting?

Obviously, this all depends on your particular case but there is a general rule of thumb that says that the overall cost of buying a property - mortgage, legal expenses etc - will be higher for the first five years that you own it than you would pay by way of rent. For the second five years, the figures will probably be pretty much the same. For the third five years and beyond, ownership will probably be cheaper than rental.

Buying commercial property on the Costa del Sol for investment purposes

See our Guide to Investment Property on the Costa del Sol.

Recently, any property investment - including investment in commercial property - has been a bit of a rollercoaster ride. After years of steadily rising commercial property values, the crash of 2007/8 saw them fall by up to 50% - and in some cases becoming totally unsaleable due to lack of demand (and so worth nothing at all) - leaving lots of owners with large losses or properties they couldn't get rid of.

Prices on the Costa del Sol have now begun to rise again and the price of prime property - top quality office blocks, shops, hotels etc in the best locations - is now (June 2016) almost back at 2007 levels.

Is the increase going to continue or have the price rises gone too far with the result that there will be a downwards correction? Frankly, nobody knows. The consensus of professional advisors is that commercial property prices will continue to grow for the next few years. This is based on the analysis that there is very limited availability of top-quality property and that the success of the Spanish economy is generating more demand than there is supply.

If you are thinking of investing in commercial property, you will need to decide which particular type of commercial property is of interest to you. Some smaller investors buy individual shop or office units in secondary locations whereas others swear by prime prestige stores and hotels.

Rather strangely, in Spain the rental yield you can expect to obtain from commercial property is pretty much the same whichever type of unit you buy. It averages about 5% per annum of the value of the property. However, those who sing the praises of prime property will tell you that they have fewer problems collecting the rent, fewer voids and much less trouble selling the property when the time comes.

The key issues

If you're thinking of investing in commercial property in Spain there are four main things you need to bear in mind:

  1. Volatility. The market has proved that it can go up and down quite violently.

  2. Diversification. Because of the high cost of much commercial property you have to be very rich to build up a diversified portfolio and so you're exposed to the danger of something going wrong with your one building.

  3. Liquidity. It will always be slow - months not weeks - if you need to sell your commercial property. In bad economic times it can be virtually impossible to do so.

  4. Management. The success or failure of any commercial property project depends on good management. You will probably not be willing or able to manage the property yourself and so you will need to find a good, reliable property management company.

Expats' Tips

Have you got experience buying a property in Spain? Tell us about it by emailing office@guides.global.


Buying a commercial property on the Costa del Sol has made a lot of sense for a lot of people but you do need to be careful when you're checking that everything about the property is right.

A combination of a good estate agent and a good lawyer will make the process as painless as possible.

Other guides of interest

 Description Link 
Buying a Resale Property on the Costa del Sol
This guide is mainly about buying a resale residential property on the Costa del Sol. It covers everything from finding a property to closing the deal and looks at the legal framework that operates when you buy a property in Spain.
Buying a Resale Property in the Costa del Sol
Buying a Property for Investment on the Costa del Sol
This guide deals with the extra things that you will need to take into account when buying commercial property in Spain. By commercial property, we mean things such as offices, shops, bars, restaurants and warehouses.
property for investment in the Costa del Sol
Buying an Off-Plan Property on the Costa del Sol
This guide is about buying off-plan property. By 'off-plan', we mean any property which you buy before it has been physically completed and where you pay more than 10% of the price before you take delivery of the keys and legal title.
Buying an Off-Plan Property in the Costa del Sol
Buying a New Property on the Costa del Sol
This guide is about buying a new house or apartment in Spain. By a 'new' property, we mean one that has already been finished but which has not yet been lived in.
Buying a new Property in the Costa del Sol

Readers' Comments


Further information?

We hope you have found this guide useful. If you need any further help, please contact us.

Manzanares Abogados S.L.

15 June 2016


This guide was co-authored by John Howell (Email: John.Howell@Guides.Global or John@jhco.org. Web: www.jhco.org or www.Guides.Global)

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