29 November 2017 – Eje Prime
Offices are getting increasingly busier. In Madrid, the real estate sector is recording pre-crisis figures, with an occupancy (take-up) rate during the first nine months of the year of 359,000 m2, the highest volume for a decade.
This indicator is also encouraging the leasing of workspaces. According to a report from the consultancy firm Knight Frank, the Madrilenian office market is aspiring to close 2017 with half a million square metres of space leased, in large part, thanks to the 3.1% growth rate of Spain’s Gross Domestic Product (GDP). This data consolidates the Spanish capital as a point of reference for the sector across the country and makes it one of the fastest growing markets in Europe.
The volume of investment in this segment of the tertiary sector as at September 2017 was €928 million, with British and US investors increasing their activity by the most this year. That fact has caused the domestic quota to decrease from 80% to 65% in just twelve months.
The availability of office space in Madrid has decreased by 11.6% during the same period; the expectation is that over the next two years, the pipeline of stock will increase by 325,000 m2. Of that future space, 26% is already leased, most notably, the 36,000 m2 of space that the British company WPP acquired on Calle Ríos Rosas, where the former headquarters of Telefónica was located, and the 48,000 m2 of space that the Ministry of Foreign Affairs is going to make use of at number 8 Plaza del Marqués de Salamanca.
In terms of the economics, the high demand in this market in the Spanish capital is resulting in an increase in prime rents in the city, with an upward trend that saw rental prices reach €29.50/m2 during the third quarter.
Original story: Eje Prime
Translation: Carmel Drake