The office market in Madrid and Barcelona begins to slowly recover, with a hiring level similar to that registered five years ago. Large new operations are expected before the end of the year.
Large corporations begin to make moves in the office market in Madrid and Barcelona. Professional services firms like KPMG, insuring companies like Reale and financial institutions such as BNP, have been involved in the most important rental operations of the Spanish property market in the last six months, indicating that the leaders in leasing of office spaces are large companies (those with more than 250 employees, and requiring more than 5,000 square meters).
“The demand by large companies depends greatly on economic trends. In times of prosperity, the number of transactions of these companies increases significantly, as happened in 2007, with 32 transactions, compared to the times of economic recession, when the activity is considerably reduced, dropping to seven in 2009 and 2012,” as explained by consultancy Cushman & Wakefield.
Between January and June, there were five major changes in the office market in Madrid, as opposed to the ten throughout entire 2014. “We must be cautious because the market has not taken off as quickly as it should have. The number of operations is similar, about 84, but we think there are big operations, between 10,000 and 15,000 meters, which lacked in determination and will be completed at the end of the year,” explains Javier Bernardes, managing partner of Cushman & Wakefield.
In total, the Madrid office market registered leasing of 217,500 square meters in the first semester, according to consulting firm CBRE, 30% more than in the same period of 2014, making it the best first half for the capital since 2010 . However, the average leased area remains modest (just over 1,100 square meters), noted by CBRE.
Among the rental operations of this scale are: the rent of 1,575 new square meters by the Adecco group, at Avenida de Cordoba 21, or 3724 meters leased by the real estate Aliseda, at 280 Paseo de la Castellana, the former headquarters of Repsol. Aliseda will share complex with Grupo Vips and Icex, who signed their removal in late 2014.
The last firm to join the macro rentals has been the British media group WPP. The company bought former headquarters of Telefónica, in Ríos Rosas street in Madrid, where it will move within three years after completely reforming the property. While acquiring it, WPP was selling property to the British group Prudential, for 25 million more than it had cost it (150 million).
As for prices, rents begin to reflect timid growths with an increase of 4% in the (most sought) prime area of the city in the first semester, as compared to the end of 2014. “We believe that recovery will occur in rents in prime area. Now, the figure drifts around 26.5 euros per square meter and we hope will reach 27 euros by the end of the year”.
Among the great removals of this year in Barcelona is the change to its new headquarters of Laboratorios Echevarne. A project designed expressly for the company in the Sant Cugat del Valles area, with a surface of 12,000 square meters.
The other big change of location has been made by the Generalitat of Catalonia, who rented 8,778 square meters on the paseo de la Zona Franca.
Regarding the investment in offices (in Madrid and Barcelona), in the first semester it surpassed 1,3 billion euros, 85% more than over the same period of 2014, becoming one of the best historical records of the last 20 years, according to Aguirre Newman consultancy.
In the case of Madrid, purchases worth 900 million were closed in the first half, more than double of the figure registered in 2014, as reported by Savills.
Original story: Expansión
Translation: Lee La