C&W: Office Rentals Down By 56% In Barcelona In Q3

21 November 2017 – Expansión

The uncertainty caused by the process directly affected the activity of Catalan companies even before the illegal referendum was held on 1 October. That finding is evidenced by the data relating to the leasing of office space, which fell by 56% in Barcelona during the third quarter, according to the Marketbeat study prepared by the real estate consultancy firm Cushman & Wakefield.

This decrease contrasts with the growth that had been achieved during the first two quarters of the year, when the leasing of office space increased by 39% with respect to the same period last year. Operations included in this study relate to both the leasing and acquisition of new space, provided that, in the case of the latter, the company uses the space directly and does not re-lease it to obtain returns.

The decrease recorded during the third quarter was spread unevenly across the different neighbourhoods. One of the most pronounced decreases was seen in the Digaonal area and along Paseo de Gracia, where the volume of space leased fell from 10,000 m2 to 4,000 m2, in other words, by 60%. According to Ramiro Rodríguez, Director of Market Research at Cushman & Wakefield, “companies from the legal, consultancy and financial sectors” are typically based in this area.

In the Plaza Europa area, the percentage decrease was even greater – 80% – but it should be noted that the magnitudes there are smaller – the volume of space leased there fell from 5,000 m2 to 1,000 m2. The companies that dominate that area are from the “technological and telecommunications sector”, said Rodríguez.

It should be noted that these figures correspond to the months of July, August and September. By then, the first alarms had been set off following the call for the illegal referendum on 1 October, but by the point, the political crisis that culminated in the application of Article 155 by the Spanish Government had not yet been unleashed.

Asked about the effect of those events, Rodríguez stated that they extended the “feeling of uncertainty”, which led to a certain stoppage in the leasing of office space. Nevertheless, following the illegal vote, there was a “return to normality”, which has allowed operations to be reactivated.

For this reason, the head of the study forecasts that, by the end of the year, the volume of office space leased will amount to around 360,000 m2, representing a rise of approximately 12.5% with respect to the 320,000 m2 that was registered in 2016. Currently, the cumulative YoY increase between January and September 2017 amounts to a similar percentage (12%), and, in theory, a similar rate of growth is expected to be maintained during the fourth quarter.

In addition to the uncertainty caused by the ‘independentista’ process, the main obstacle that companies looking for new offices will find is the shortage of available space, especially when it comes to larger offices. According to data compiled by Marketbeat, the supply in Barcelona had an availability ratio of 8% at the end of September, which represents a decrease of 3.5% with respect to the previous quarter.

Original story: Expansión (by I. Bolea)

Translation: Carmel Drake