While spending the past weekend in the Costa del Sol holiday resort of Puerto Banús, I couldn’t help noticing many signs that the local economy still seems to be in the doldrums. While there wasn’t any shortage of people drinking, eating and partying, many owners of big-ticket items appear to be struggling. Puerto Banús is, according to Wikipedia, “a luxury marina and shopping complex for the jet-set and the super rich and the lavish opening of the complex in May 1970 was attended by, amongst others, the Aga Khan, film director Roman Polanski, Playboy founder Hugh Hefner, Dr. Christian Barnard (pioneer of the heart transplant), and Prince Rainier & Princess Grace of Monaco”. Given the location’s appeal to the global super-rich, the read-through to the wider Spanish economy is clearly minimal. However, the economic activity in Puerto Banús should be in some way related to the incomes of the global super-rich. Though this is only anecdotal evidence, the following factors were quite apparent:
- A very large number of the luxury yachts moored in the marina bore “Se Vende” signs.
- Empty units have appeared in the shopping parades surrounding the marina itself, with high-end luxury stores like Gucci and Fendi siting incongruously next to the boarded-up and abandoned units.
- Many apartments and villas in the resort were empty and/or bore “Se Vende” signs.
- The landscape between Malaga Airport and Puerto Banus contained a number of empty residential complexes and abandoned construction projects.
On the basis of this, I would say there are a large number of investors still struggling to offload assets in the face of challenging financial circumstances, be they individuals, construction firms or banks.