Madrid‘s office market shows clear signs of recovery. Knight Frank reports that rental caps rose from 25 to 30 €/m2 in the last 12 months (from June 2013 to June 2014), meaning a 20% jump. These prices were seen in 2005, while in 2008 they reached their peaks. ‘The situation is highly encouraging for the landlords‘, says Raul Vicente, Office director at the international real estate consulting firm.
The increase in prices is mostly observed in the best office buildings in the capital, located in the CBD (Central Business District) area, due to short supply of such good quality properties.
Lastly, noteworthy rental operations have taken place in a building situated at 41 Castellana street and inside the Torre Picasso Tower (white skyscraper pictured on the left). In case of the first, 335 m² were rented for 30 euros/m²/month. In Torre Picasso that enjoys a 100% occupancy rate, there have been six operations involving less than 1.000 m² each, at between 30 and 35 euros, and two of larger scale (i.e. over 1.000 m²) agreed at 29 and 31 euros paid monthly.
Over 380.000 Square Meters Rented
Total office space rented throughout the year 2013 amounted to 380.000 m², meaning 26% more than in 2012. Availability rate of modern office buildings located within the M-30 ring road posts an only 2% availability, lower than in London (3%).
The conclusion drawn by Knight Frank suggests the office market have bottomed-out, especially in the most attractive business areas. Moreover, the company predicts in 2015 the monthly payments will rise even more, above all in case of downtown, modern office spaces. The pricing growth will be more moderate in the suburban areas.
Original article: Observatio Inmobiliario
Translation: AURA REE