Aug 29, 2016
Until recently, Barcelona's historical industrial district, Poblenou, was awash with abandoned premises but it’s now on track to becoming the Silicon Valley of Catalonia.
Poblenou: the new frontier for Barcelona property investments
Hardly a century ago, Poblenou dominated the industrial horizon of Barcelona but when over 1,300 industries closed between the 1970’s and the 1990’s, its economy ground to a halt, leaving little but abandoned industrial buildings. It was only during the last decade that local authorities took a new look at Poblenou and started actively redeveloping it and improving the local infrastructure. Nowadays, the post-industrial zone is pegged as the hottest new hub at the intersection of Avinguda Diagonal and Avinguda Meridiana Gran Via de les Corts Catalanes.
Credit: Henrique Ferreira The Torre Agbar is Poblenou's iconic skyscraper
The famous Plaça de les Glòries Catalanes is Poblenou’s central square and is within walking distance of Torre Agbar, the 38–storey mixed-use skyscraper and shopping centre reminiscent of “The Gherkin” in London’s financial district. The area is well-connected by metro and tram to such famous locations as Plaça de Catalunya, La Sagrada Família and Ciutat Vella. The new plans, known as the 22@ project, include a major underground train station and underground road thoroughfares to leave room for 11 ha of open green areas as well as a museum, medical facilities, a public library and a sports centre. There will also be a high-speed road connection linking the airport of Barcelona to the historical centre via Poblenou. At least €180 million will be spent on the 22@ project.
Residential property costs about €3,800 per sq m in Poblenou, which is roughly the average going rate in Barcelona.
Commercial property goes for €2,700 per sq m for the office segment and €1,950 per sq m for street retail, which is about 10−15% higher than the city average.
Property prices in Poblenou are still 36.5% lower than the 2007 peak when they ran at €5,990 per sq m on average – meaning that there is still plenty of room for growth.
Since the Spanish market first showed signs of recovery in 2013, prices in Poblenou have been gaining 3−5 % every year in a growth spurt that exceeds Barcelona's average. In fact, in just three short years, property values have increased by 12% compared to 10% on average throughout the city. This is a result of growing demand: residential property transactions in 2015 were 46% higher than the previous year, in contrast with just 15% on average for Barcelona.
Rental demand has also been on the rise and rates have grown by 11% year-on-year between 2015 and 2016, while average citywide growth was only 9%.
The same goes for commercial property. According to CBRE, an international real estate services company, office rental rates in Poblenou have grown by 21% since 2014, compared to 15% on average in Barcelona, while office vacancy rates declined 18%, compared to just 9% citywide.
Poblenou is a gentrification hotspot. Since 2010, the district’s population has grown by 6.6%, despite the negative demographic trend in Barcelona (–1% on average), and is attracting both Spaniards and foreign citizens whose numbers have increased by 2.5% since 2010. For non-nationals, the area has two leading attraction points: there are beaches nearby and apartments are still relatively affordable.
Credit: Juanbpn Poblenou is developing a diverse collection of architectural creations
The historical industrial zone has developed quickly over the last decade thanks to the 22@ project and its convenient position near the seafront, making it a prime target for gentrification and property price growth. In fact, Poblenou is often referred to as the Brooklyn of Barcelona. Since 2010, the average local household income has increased by 11% and the unemployment rate is lower than the city average (7.3% vs. 8.2%).
Developed surface area growth between 2010 and 2015
Construction rates are also significantly higher and old industrial buildings are making way for new homes. So far, about two-thirds (65%) of the area is composed of residential property but, even though the industrial segment still carries a lot of weight, it is slowly being phased out through demolition, redevelopment and new construction projects. Since 2010, the number of offices and hotels in the district has doubled.
Transportation infrastructure in this area is well developed: Poblenou is located at the intersection of two metro lines (L1 and L4) and a tramline (T4). Furthermore, it is within easy access of the airport, which is just 30 minutes away by car while the city centre is only 15 minutes by public transport.
Tourists come to Poblenou for the Mar Bella and Bogatel beaches, which are considered to be among the best in Barcelona. There are also many points of interest like Poblenou Park, Rambla del Poblenou, Poblenou Cemetery (19th century tombs and buildings), Torre Agbar, Plaça de les Glòries Catalanes, the local flea market (Encants) and the famous Poblenou-Manuel Arranz library.
Students attend the School of Professional & Executive Development that is specialised in technology at the Polytechnic University of Catalonia (Universitat Politècnica de Catalunya), a well-respected higher education institute that ranks in the world top 50 for its architecture and civil engineering courses.
Professionals come to Poblenou for work. The area has a lot of offices, which are mainly located near Avinguda Diagonal. The 22@ project has also promoted the appearance of co-working space as they plan on turning the district into a hub for technology and innovation. Many IT companies and start-ups have made Poblenou their headquarters and it is now becoming a recognised local and global tech centre that attracts highly-skilled professionals from many areas including art and design.
There was a time when Poblenou was nothing but an impoverished shadow of its former industrial glory but with this ambitious urban renovation project, the district is finally gaining a brand new reputation. It attracts tourists and residents alike, from Spain and abroad, while carving out a space as Catalonia’s Silicon Valley. With more and more fashionable lofts, restaurants and cafés, art galleries, workshops and design bureaus entering this market, it is by far the most promising district of Barcelona for investors.