Tag: availability rate

Madrid’s Office Market in 2019: Stable Yields & Investment of €3bn

20 February 2019 – Eje Prime

Investment in offices in Madrid is on the rise. Total investment of €3 billion is forecast in the office market in the Spanish capital this year, which will see it maintain the yield for prime offices at 3.75%. In terms of office rents, a boom of 9.8% is forecast, along with a decrease in the availability rate, which is set fall from 11.6% in 2018 to 9% in 2021. Modest growth forecasts for the sector, with a lower supply of prime spaces, are going to contribute to an increase in rents.

With this data, Madrid is positioning itself amongst the capitals with the lowest yields on its luxury offices, with a figure comparable to those of Singapore (3.34%), Amsterdam (3.35%) and Paris (3%), but well below those of Moscow (8.5%) and Washington DC (6.2%), according to the Global Outlook 2019 report, compiled by Knight Frank.

In terms of the growth forecast for office rents, the Spanish capital is expected to maintain stable growth (…).

In terms of the availability rate, Madrid is forecast to decrease from 11.6% in 2018 to 9% in 2021, placing it amongst the cities with most available offices, well below Berlin, with a forecast rate of 2.2% (…). Available prime offices will also decrease, which will lead to a rise in rents. According to the study, this is the result of the recovery of the residential market, which is also sparking interest amongst investors.

One of the greatest opportunities in the sector are the coworking offices, which are transforming conventional offices into new spaces for working and incentivising employees. “Whilst some markets are reaching maturity, at the global level, we expect to see a boost to this business in 2019”, say the authors of the report.

In summary, the office market in Spain is expected to be relatively stable during the year ahead, despite global challenges (…).

Original story: Eje Prime (by Marta Casado Pla)

Translation: Carmel Drake

Savills: Logistics Leasing in Madrid Rose by 2% in 2018 to Exceed 935,000 m2

14 January 2019 – Savills Aguirre Newman

The logistics market in Madrid has registered a new leasing record. The boost from e-commerce has been the main driver behind the absorption of 935,000 m2 of space in 2018, which represents an increase of 2% with respect to the historical record figure in 2017, according to data from Savills Aguirre Newman.

During the last quarter, 23 operations were signed involving more than 300,000 m2 of space, compared with 24 operations and 308,000 m2 of space during the same period in 2017. During the year as a whole, 77 operations were registered in 2018, compared with 70 during the previous year. It is worth highlighting the importance of the cross-docking activity during 2018, where seven operations were closed.

In terms of rental prices, the €8/m2/month peak that established the annual maximum was recorded at T4 (Airport) in Barajas. Excluding that figure, due to the uniqueness of the Barajas market, maximum rents exceeded €6/m2/month in a cross-docking operation in San Fernando de Henares. The incorporation of new high-quality projects that are adapted to the requirements and expectations of the operators have favoured an increase in prime rents to €5.5/m2/month (+7% YoY).

In terms of the size of the operations, almost 50% of the space leased during the last quarter of the year was concentrated into four operations spanning more than 30,000 m2 each, all of which were signed in the third ring.

By area, the distribution of the surface area leased between October and December was very homogeneous, with 55% and 45% registered in the Corredor del Henares and the southern area, respectively, although the Corredor del Henares continued to capture the most demand. The distribution in terms of the number of operations clearly showed the superiority of Corredor del Henares, which accounted for 70% of all activity (16 operations).

The annual analysis by area reveals a similar picture. The volume of surface area leased was very similar (>495,000 m2 in Corredor del Henares and >408,000 m2 in the southern area), but by number of operations, Corredor del Henares again accounted for the bulk of activity (48 operations versus 22 in the south).

Activity in the land market is continuing to gain weight. During 2018, 34 operations were signed in total spanning 1,800,000 m2 (+60% YoY). It is worth highlighting the three areas that accounted for almost 50% of the land surface area operations: Guadalajara (>350,000 m² in 2 operations), Illescas (>326,000 m² in 4 operations) and Torija (>279,000 m² in 4 operations).

The year closed with an availability rate of 6.9%, which represents a decrease of almost two points with respect to 2017. During 2018, more than 650,000 m2 of space was incorporated into the market, of which 67% was already committed. The future supply for 2019 will exceed 1,500,000 m2, of which 30% already have pre-rental contracts.

The dynamism in the market for users of the logistics sector during 2018 has been reflected in the investment market, with 45 operations exceeding €1.3 billion. Those figures mark new records in the historical ranking. The number of transactions involving individual assets stood out since it exceeded the figure recorded in 2017 by three times.

Original story: Savills Aguirre Newman 

Translation: Carmel Drake

BNP Paribas Real Estate: 85,500 m2 of Office Space was Leased in Barcelona in Q1 2018

24 May 2018 – Eje Prime

During the first quarter of 2018, 85,500 m2 of office space was leased in Barcelona and its area of influence, which represents 33% more than the quarterly average for the last 10 years (64,445 m2) and 5% more than the quarterly average for the last three years, according to research compiled by BNP Paribas Real Estate.

“The strong performance in terms of demand between January and March 2018 reflects the fact that the occupational market remains dynamic”, states the report.

During the first three months of the year, 84 new contracts were signed in total, below the quarterly average for the number of operations signed in the last three years (93), however, these contracts involved larger surface areas, thanks to expansions and the creation of new companies.

The three largest operations closed during the quarter were located in the decentralised and peripheral areas, specifically in the BCN Fira District multi-functional complex (6,467 m2), El Prat de Llobregat (5,000 m2) and Cornellá (4,863 m2).

The 22@ district retained its appeal, in fact, the fourth most significant operation, the rental of 3,500 m2 by the Town Hall of Barcelona, was signed in that district. In total, 28% of the surface area leased during the first quarter was located in 22@ and the district is expected to attract more demand, as new office spaces come onto the market. The availability rate of the market in Barcelona amounts to 10%.

The average rental price in the Barcelona market also continued its upward trend. Prime rents, which closed 2017 at €23.5/m2/month, had risen to €24/m2/month by March 2018. Behind that behaviour is the shortage of surface area available in the CBD as well as the scarcity of high-quality buildings.

Original story: Eje Prime 

Translation: Carmel Drake

BNP Paribas: Logistics Leasing Rose by 48% in Cataluña in Q1

20 April 2018 – Eje Prime

The leasing of logistics space in Cataluña rebounded by 48% during the first quarter of 2018 with respect to the same period a year earlier, to amount to 185,890 m2, according to a report compiled by the Research Department at BNP Paribas Real Estate. The leasing figure is 40% higher than the quarterly average for the last three years, during a period of consolidation in the Catalan logistics market.

A large proportion of the surface area leased during the first quarter of the year saw the pre-rental of warehouses under construction and turnkey projects. In this sense, operations involving surface areas ranging from 7,000 m2 to 50,000 m2 stood out in particular.

Rental prices continued to rise and prime rents increased by 3%, to reach €6.5/m2/month. The good pace of logistics leasing indicates that the upward trend will continue over the next few quarters. In terms of average rents in the local, regional and national logistics corridors, the same behaviour is being observed in terms of rising prices and a decrease in shortages, with growth of 5% in annual terms, to reach €4.7/m2/month.

On the other hand, the availability rate of logistics space in Cataluña continued to fall to reach 2.8%, at the same time as construction activity was increasing due to demand for rental properties. The development of turnkey projects means that the available surface area has not been affected, remaining at very low levels.

Original story: Eje Prime 

Translation: Carmel Drake

BNP Paribas: Record-Breaking 39,500 m2 of Office Space Leased in Valencia in 2017

22 March 2018 – Eje Prime

Offices are breaking records in Valencia. The leasing of office space in the Mediterranean city reached a historical high in 2017, amounting to 39,500 m2, according to a report compiled by BNP Paribas Real Estate. Moreover, the good behaviour in terms of demand led to a slight upward trend in rental prices, which are now approaching €14.50/m2/month in the most iconic buildings of the old town, around the Plaza del Ayuntamiento.

“Since the end of 2013, the final year of the economic recession, demand has behaved in a positive way”, explain sources at the consultancy firm. The activity drivers that have grown by the most in recent months have been the construction sector, together with the services and industrial sectors.

“Demand has not focused on a particular area, given that between 8,000 m2 and 12,000 m2 of office space has been leased in each of the four areas that comprise the market.” In the prime area, 8,300 m2 of space was leased, a much higher figure than the average for the area over the last ten years (3,000 m2)”, they maintain.

“The good results in terms of space leased in recent years, coupled with the lack of new build projects, are generating a considerable reduction in terms of the availability rate in the Valencian market, which, at the end of 2017, decreased to 10.4%, over a total stock of 774,000 m2, which means that currently, there is 80,546 m2 of space available in the market”, conclude the sources at BNP.

Original story: Eje Prime

Translation: Carmel Drake

C&W: 130,000m2 of Office Space Leased in Sant Cugat since 2015

15 March 2018 – Eje Prime

Sant Cugat del Vallès is growing strong in Barcelona’s slipstream. In addition to being one of the most sought-after cities in the residential market, the office sector is also strongly committed to this location, where 130,000 m2 of office space has been leased since 2015. Those figures place the city as the second location of choice for this segment in the province of Barcelona.

Currently, there are more than 3,100 companies installed in the city, with a financial district containing 49 hectares of business parks and more than 62,000 professionals working in its office buildings, according to the Marketshot report prepared by the consultancy firm Cushman&Wakefield.

According to the research, Sant Cugat del Vallès has played a fundamental role in the expansion of Barcelona’s office stock in recent years, evolving from a dormitory city into a nucleus of activity for the services sector, bringing together workers and residents alike.

Since 2015, the number of office rental operations in the city has soared. During that year, a record volume of office space was leased, with more than 75,000 m2 signed. In 2015 and the following year, 54 transactions were signed in the office market, spanning a leasable surface area of 104,000m2, which represented 27% of all the office space leased in the entire province of Barcelona.

In recent years, large operations have been carried out with the arrival of Stradivarius into an office building that spans 26,400 m2; and the leasing of offices to Echevarne, Mapfre and Natura Bissé Internacional, which contracted 12,000 m2, 10,000 m2 and 9,200 m2 of space, respectively.

In terms of the type of office being demanded, in Sant Cugat, prime products stand out. Quality A-rated offices account for 93% of the total space leased in the city, whilst properties rated Quality A/B+ represent 96% of the leasable surface area. These records have generated a significant decrease in the space available in the city.

In 2017, the shortage of available office space in Sant Cugat became clear with the leasing of just 22,000 m2 of space, a much lower figure than had been recorded in previous years. And, currently, the available surface area has been reduced to just 25,500 m2, which represents an availability rate of 4.9%, when just a few years ago, it stood at 30%.

Sant Cugat is a sought-after enclave for sectors such as pharmaceutical, R&D and technology, due to the services, communications and technical quality of the buildings, according to the report. It also highlights the location in the city of the Esadecréapolis knowledge and innovation centre as a “powerful” magnet for those types of companies to set up shop there.

1,800 m2 on average 

Since 2015, the average rental operation in Sant Cugat has amounted to around 1,800 m2, when between 2010 and 2014, the figure was less than half (750 m2).

Today, in Sant Cugat, there is more than 115,000 m2 of potential office space, of which 100,000 m2 is located on buildable land, without a construction start date. The potential for growth in the stock is significant, and if all the projects were to be completed, the office supply in the city (the capital of the office market on the outskirts of Barcelona) would increase by 22%.

Original story: Eje Prime

Translation: Carmel Drake

Inv’t In Offices Exceeds €2,500M In 9m To Sept

22 October 2015 – Expansión

They are the most desirable assets in the sector and Socimis, investment funds and traditional real estate companies alike are all bidding for them. They are office buildings. During the first nine months of the year, this type of property has starred in investment operations amounting to €2,500 million, an increase of 15% compared with the total investment volume recorded in 2014 as a whole.

“Last year, €1,665 million was invested (in offices), of which €655 million was spent during the third quarter. This strong level of activity coincided with the closure by many Socimis of their first operations, which accounted for almost 40% of the quarterly total. This year, the figure for Q3 was 5% higher than the amount recorded during the same period in 2014, but if we look at the year to date, the cumulative total exceeds the total for the whole year 2014, by 15%”, said Pablo Pavía, National Investment Director at Savills España.

Some of the most active players include the large Socimis, such as Axiare, which has invested €243 million on the acquisition of ten buildings, mostly in Madrid and Hispania – which is not a Socimi itself, but which channels the majority of its investments through a subsidiary that is –, which has spent more than €97 million on the purchase of four office buildings.

Alongside the Socimis, which accounted for just over one third of the market, we have the funds and managers, such as Iba Capital, which has purchased several headquarters, including Vodafone’s. Insurance companies such as Axa and Mapfre monopolise the buying ranking, together with traditional real estate companies such as Colonial, which is currently analysing purchases worth €1,000 million.

Thanks to this investor boom, the average availability rate in Madrid is now 10.6%, a figure that has fallen below the 11% threshold for the first time since 2011 and which confirms the trend that began in the middle of 2014, according to JLL. In the case of Barcelona, the availability rate is 11.4%, a similar figure to the levels last seen in 2009.

Original story: Expansión (by Rocío Ruiz)

Translation: Carmel Drake