Tag: prime rents

BNP Paribas: Office Rentals Soar in Barcelona during Q1 2019

23 May 2019 – La Vanguardia

The office market in Barcelona broke historical records in terms of space leased and rental prices during the first quarter of the year, according to a report from the consultancy firm BNP Paribas Real Estate.

According to the data, 152,300 m2 of office space was leased during Q1 2019, up by 65% with respect to the same period in 2018, boosted by a 60% increase in demand for large spaces (those measuring over 3,000 m2).

According to David Alonso, Head of Research at BNP, the office market in Barcelona was traditionally dominated by SMEs demanding spaces measuring less than 1,000 m2. Nevertheless, since 2015, that trend has changed with the arrival of technological companies requiring larger offices, and since 2017, with the entry of coworking companies – the latter leased 22% of the space let during Q1 2019.

As such, 91 new contracts were signed during the first quarter of 2019, with the 22@ district as the main driver, accounting for 30 of the operations and 40% (60,900 m2) of the space.

Nevertheless, the two largest operations were closed in more secondary areas: the rental of 18,000 m2 in Sant Joan Despí by Gallina Blanca and the rental of 17,209 m2 on Gran Vía in Barcelona by La Caixa.

All of this activity drove up rents with prices in prime areas, such as the best buildings on the upper end of La Diagonal, reaching €27/m2/month, and some operations even reaching €30/m2/month, whereby exceeding the maximum recorded in 2008 (€27.5/m2/month).

Original story: La Vanguardia (by Rosa Salvador)

Translation/Summary: Carmel Drake

Knight Frank: Investment in Offices Amounted to €1.3bn in Q1 2019

7 May 2019 – Eje Prime

According to data compiled by Knight Frank, investment in the office sector amounted to €1.3 billion during the first quarter of 2019.

By type of investor, in Madrid, 45% of buyers were funds, 25% were institutions, 18% were real estate companies, 9% were corporates and 3% were Socimis. Meanwhile, in Barcelona, 64% of purchasers were investment funds, 19% were corporates, 13% were private investors and 4% were real estate companies.

Yields in the prime areas remained stable at around 3.75% in Madrid and 4% in Barcelona, which are in line with previous years and similar to those observed in other major European cities.

The average prime rent in Madrid also remained stable at around €30.50/m2/month, with prices rising to €38/m2/month in some of the most sought-after spaces in the CBD. In total, 124,000 m2 of office space was leased in the capital during Q1 2019, up by 4% YoY.

Original story: Eje Prime 

Translation/Summary: Carmel Drake

CBRE: Logistics Investment in Valencia Soared by 90% in 2018 to €80M

10 April 2019 – Las Provincias

According to the real estate consultancy CBRE, logistics investment in the province of Valencia rose by 90% YoY in 2018 to €80 million. Nevertheless, it warned that speculative projects have also increased, namely those that are built without a prior contract or guarantee in place for their subsequent sale or rental. Having said that, the market has been readily absorbing the new properties, so far at least, given the rise in demand for logistics warehouses.

According to Javier Muñoz (pictured above, left), Head of Industrial and Logistics at CBRE in Valencia, more high-quality products need to be constructed, given that only 27% of the warehouses in the province currently comply with logistics requirements.

In terms of the type of operations completed last year, the largest deals involved turnkey projects, whilst the number of speculative projects increased. In total 22 transactions of both types were completed in 2018 compared with 10 turnkey projects in 2017. The total stock increased by 24% as a result to reach 2,832,850 m2, and the availability rate at the end of Q1 2019 was 5.9%.

Rental prices continued to rise, with prime rents reaching €4.50/m2/month, in line with those observed in other European cities such as Rome, Amsterdam and Milan. Yields on logistics assets in Valencia currently amount to 6.7% thanks to the strong performance of the sector and interest from large international and smaller local players alike.

Original story: Las Provincias (by Elísabeth Rodríguez)

Translation/Summary: Carmel Drake

CBRE: 1.9 million m2 of Logistics Space was Leased in 2018

29 January 2019 – Eje Prime

The logistics wave is showing no signs of letting up. Leasing in the sector amounted to 1.97 million m2 last year, a historical record, according to CBRE. The data includes Valencia, Zaragoza, Sevilla, Málaga, the centre of the country and Cataluña.

Meanwhile, investment in the sector amounted to €1.5 billion. The consultancy firm highlighted that the high demand and available supply is causing a boom in projects, above all in central areas of the country.

This mismatch between supply and demand is also driving up prices: prime rents in Madrid and its area of influence rose by 5% to €5.50/m2/month, whilst in Cataluña, they rose by 8%, to €7/m2/month.

Original story: Eje Prime 

Translation: Carmel Drake

CBRE: Office Leasing in Madrid Records Best Third Quarter for a Decade

17 October 2018 – Real Estate Press

The office market in Madrid recorded its best quarter of the year between July and September with almost 142,000 m2 of office space leased. That figure makes it the sector’s best third quarter for a decade, according to the latest data published by the real estate consultancy CBRE.

“Leasing figures during the third quarter are traditionally characterised by less activity due to the holiday period, so this latest data highlights the strength of the office market in Madrid”, says José Mittelbrum, National Director of A&T Investor Leasing Offices at CBRE España. “Looking ahead to the end of the year, it is very likely that, if some of the large deals currently active in the market are closed, then 2018 will see office leasing figures in Madrid very similar to those of 2017, which amounted to more than 600,000 m2, figures that have not been seen since 2007”, added Mittelbrum. Since January, almost 400,000 m2 of office space has been leased, the best figure since 2008.

Increase in rents

The increase in demand, boosted by demanding occupants with respect to the quality of the properties, and the reduction of the available supply, especially in renovated buildings and new properties in the central business district (CBD), led to a YoY increase of 9% in prime rents during the third quarter of the year to around €33/m2/month.

Empty space in high-quality Grade A buildings has decreased by 26% over the last year, which has led to situations of competition between several candidates for the same building.

Since the lowest point of the previous cycle, prime rents have grown by 35%. Other submarkets are also rising: average rents, calculated on the basis of actual operations, between July and September, increased in all submarkets with increases of more than 30% in the CBD and Secondary Centre (inside the M-30) and of between 15-20% on the Northern (A-1) and Eastern (A-2) axes of Madrid. Rising rents and the prospect that this trend will continue is one of the reasons why the office market in Madrid is the priority objective for a large number of domestic and international investors.

Notable operations

Madrid Norte saw significant activity in the last quarter, with two high-profile operations: the rental of the Oxxeo building in Las Tablas to Cap Gemini (9,300 m) and the rental of 7,000 m2 in Torre Chamartín by Deloitte; both new build properties.

The Public Sector reaffirmed its return to the Madrilenian office market, by closing two of the ten largest operations in the third quarter, namely, the rental of 4,200 m2 in the Agustín de Foxá, 25 building by the Ministry of Finance and of 2,400 m2 in Fray Luis de León, 11 by the Community of Madrid.

Finally, the flexible space operators continued their expansion: WeWork moved into Castellana, 77 to occupy more than 4,600 m2 in that building, the first to obtain the WELL Qualification in Spain. It is worth highlighting that so far this year, 10% of the office space leased in Madrid was taken up by flex-space companies, compared with 4% in the third quarter last year.

Available supply

At the end of September, the available surface area in the Madrilenian office market amounted to around 1.22 million m2, equivalent to 9.7% of the total stock of offices in the capital, compared to 11.7% a year earlier.

Over the coming months, investors’ commitment to reposition existing offices means that iconic buildings are going to come onto the market such as the Los Cubos building in Plaza de España and the Axis building in the heart of Plaza de Colón (…).

Original story: Real Estate Press

Translation: Carmel Drake

Savills: Investment in Offices in Madrid Will Amount to €2bn in H2 2018

19 July 2018 – La Vanguardia

Madrid is accumulating investment projects in the office market worth almost €2 billion, which will materialise during the second half of this year, according to the consultancy firm Savills Aguirre Newman, which estimates that the figure for Barcelona amounts to around €700 million.

In Madrid, there was an 11% reduction in the volume of office space leased during the first six months of the year, and absorption in the office segment of the capital amounted to 273,000 m2.

In Barcelona, the transacted volume amounted to 207,447 m2, and the peripheral area was where operations grew by the most during the six months to June, up by 78% YoY, to 56,030 m2.

In terms of average rents, in Madrid, the figure reached €17.70/m2/month, up by 12% compared to the first half of last year, whilst the theoretical “prime” rent in the central business district amounted to €32/m2/month, up by 10% YoY.

The report indicates that in Barcelona, the evolution of rental prices is continuing to rise, with growth of 6.2% on average over the last year.

The average price in “prime” areas in the central business district of the Catalan capital amounted to €19.35/m2/month, compared with the new business areas, which saw prices of €15.70/m2/month.

Of the operations planned for Madrid this year, the consultancy firm highlighted new developments and renovations in Vía de los Poblados (33,000 m2), Puerto de Somport (14,000 m2), Avenida de Bruselas (14,500 m2) and Príncipe de Vergara (11,400 m2), amongst others.

In terms of the main projects in the Catalan capital this year, Savills Aguirre Newman highlights the Luxa building, with a surface area of 17,000 m2, Tánger 66 (8,000 m2) and Parc Glòries (24,000 m2). In 2019, the Can Batlló project in Plaza Cerdà will be completed, with a surface area of 17,000 m2, as well the Hexagon in 22@, spanning 10,800 m2.

Original story: La Vanguardia

Translation: Carmel Drake

C&W: New Retail Park Openings in 2018 Set to Exceed Those Registered in 2017 by Five-Fold

7 June 2018 – Eje Prime

Out-of-town retail parks are seducing the sector. Planned openings of retail parks in Spain this year span a surface area of 180,000 m2, which represents an almost five-fold increase compared to the 38,000 m2 registered in 2017, according to data analysed by the real estate consultancy firm Cushman&Wakefield. Specifically, the investment volume over the last 12 months in this segment amounted to €650 million, with a prime yield of 5%.

During this period, the Vidanova Parc project, in Sagunto (Community of Madrid) is the largest planned opening for the year with a gross leasable area of 45,000 m2, followed by the Torrevillage retail park (Zaragoza), with 35,000 m2 and Jaén Plaza (Jaén), with 29,000 m2. In addition, a further seven retail parks, with a combined GLA of more than 10,000 m2 are in the pipeline.

The consultancy firm has identified an increase in the demand for secondary retail parks in light of the shortage of available prime locations, greater activity in the home and decoration sectors and the consolidation of omnichannel sales

In this way, the firm highlights traditional operators such as Leroy Merlin, Ikea, Media Markt and Maison du Monde, which have expanded their presence towards the centre of cities in spaces measuring between 1,500 m2 and 4,000 m2, in search of more urban demand, with new ways of consumption and a lower dependence on cars.

On the other hand, rents remain stable in both prime and secondary retail parks. Thus, in Madrid, they amount to €21.50/m2/month and in Barcelona, they cost €18/m2/month for prime parks.

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

CBRE: Logistics Investment in Valencia Doubled to €60M+ in 2017

18 April 2018 – Las Provincias

The logistics business in the Community of Valencia skyrocketed last year. Logistics investment in Valencia doubled to exceed €60 million in 2017. The increase was driven primarily by large operations such as the purchase by TH Real Estate of Carrefour’s platform in Ribarroja and the acquisition by P3 Logistics of another platform that had formed part of GreenOak’s logistics portfolio.

That is according to a report compiled by the real estate consultancy CBRE, which places Valencia behind Madrid and Barcelona in the ranking of cities based on interest from funds in investing in logistics. On the other hand, leasing of logistics space also reached a new record in Valencia in 2017 with more than 220,000 m2 of space transacted.

The study reports that the logistics stock in Valencia amounts to 2,244,000 m2, of which just 20% may be considered as prime or maximum quality product. This increase is due both to the construction of new logistics warehouses and the renovation and adaptation of old industrial warehouses for this new use.

Lack of supply

Despite the delivery of more than 65,000 m2 of newly-built logistics warehouses, the availability rate decreased to 4.3% in 2017. The data shows the increase in demand for large spaces (measuring more than 10,000 m2, which accounted for 50% of the space leased last year). By area, the region to the north of Valencia accounts for the highest percentage of available industrial space with 13,200 m2 (6.4%), followed by the central area with 53,100 m2 (9.7%) and finally the south with 30,500 m2 (5.1%).

Ribarroja is still the most sought-after area with the highest leasing volumes. In fact, 15 of the 27 operations recorded in 2017, which together saw 125,000 m2 of the surface area contracted and which represented 60% of the total space leased (were located there). The continuous increase in demand and the scarce supply of quality products has caused prime rents to increase by 25% to €51/m2/year.

The centre of Valencia saw the highest price rises for both land, between €150/m2 and 225/m2, and rent, between €3/m2/month and €4.25/m2/month. The north and south regions recorded similar rental prices, between €2.75/m2/month and €3.90/m2/month, although the southern region was slightly more expensive than the north with prices of around €200/m2.

Original story: Las Provincias (by Á. Mohorte)

Translation: Carmel Drake

Madrid’s Offices Record Highest Occupancy Rates For 10 Years

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