Around 30 homes were also evacuated due to the blaze, which broke out in Malaga on Saturday.
Jose M Garcia Urbano, the mayor of Estepona, shared an image of the fire in the El Padron area of the Spanish town on social media.
He said the fire was under control on Saturday afternoon, and had burned the Laguna Village shopping centre and also affected the Kempinski hotel in the area.
No one was hurt, he added.
Images showed black smoke billowing in the sky as buildings were alight.
People shared their videos on social media, which captured the blaze in the distance from where they stood on the beach or by a pool.
Mr Urbano shared pictures of him visiting the damaged shopping centre after the fire, vowing to help rebuild it.
"I also want to thank all the staff and professionals who have worked to quickly extinguish this tragic fire," he tweeted on Saturday evening.
The blaze comes around a week after a fire at a luxury hotel in Costa del Sol killed one person and injured nine others.
A French tourist died after the Sisu Boutique Hotel in Puerto Banus burst into flames one morning last week.
Images shared on social media showed people trying to escape by climbing out windows up the building.
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