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Office Market Thrives in Madrid & Barcelona
19/08/2014 – Expansion
Since September 2013, the real estate market in Spain has not been forsaken by great investments. Also, since that time, large advisory firms started to detect ´the atmosphere´promising the looming apetitte and subsequent vivid activity in the market.
Now, realtors agree that currently Spain is the hottest market in Europe, offering the biggest number of opportunities and witnessing a shooting-up growth which is there to stay.
Hotels, shopping malls and offices sell like hot cakes. Cushman & Wakefield assert that the Spanish market is presently the most attractive in the Old Continent in terms of the retail business investment.
Thanks to turn in the dull tendency, ´prices go up in Spain due to huge competition among the buyers´, the advisory firm forecasts. ´The United Kingdom and France have taken the first two places on the trade market, followed by Germany (previously the leader)´, it adds.
Moreover, a report by Jones Lang Lasalle confirms that the office market regains the shine in Barcelona and Madrid. ´Investment volume in the first half of 2014 amounted to €275 million, resulting in a rise in the capital´s average which has been showing €515 million for the past five years´, the study reveals.
This advisor pointed out a slight upward movement in rental prices in the ´business heart´of Madrid, increasing from average 24.25 Euros per square meter up to 24.50 €/m2. This way, the district breakes up with the cap persisting in the area over the past seven quarters. This, in turn, proves ´stability´in the office market.
Madrid
In the first half of the ongoing year, almost 190.000 square meters found new tenants. After the first quarter which registered similar rental contracts on 100.000 square meter areas, the real difference was seen in the second quarter with the total of 83.000 square meters, juxtaposed with the 55.000 sq m from the Q2 2013. The H1 figures amaze if we think they exclude the operation of Vodafone that signed a contract on renting a 50.000 square meter office space.
Apart from that, Jones Lang Lasalle reminds of the recent transactions by insurance groups like Zurich, Axa and Línea Directa, as well as the proliferate purchases of newly listed Socimis (Spanish REITs).
Barcelona
If it comes to the second largest city of Spain, office market rented nearly 57.000 square meters in Q2 2014 which is by 35% more than a year earlier and by 6% less than in Q1 2014. Year-to-date, almost 118.000 square meters of the office space have been rented. To compare, in the same period of 2013, the numbers showed 90.000 square meters, by 24% less.
Maximum price in office buildings located along the prime zone streets (i.e. the Paseo de Gracia and the Diagonal) maintained on a similar level of 17,50 Euros per square meter per month, whereas in the very center of Barcelona, the values jumped slightly by 1,5%.
For the next quarters, Jones Lang Lasalle foresees ´small rebound in the prime areas, with prices still climbing throughout 2015. However, there might be a problem with meeting larger demand as the city struggles with rapidly shrinking new office supply´.
Original article: Expansión (by J. M. L.)
Translation: AURA REE