C&W: 86 Office Spaces Spanning 101,000 m2 were Leased in 22@ in 2017

2 July 2018 – Mis Oficinas

According to the Marketshot report issued by the real estate consultancy Cushman & Wakefield, Barcelona’s 22@ district closed 2017 with 86 rental operations, spanning a total surface area of 101,000 m2, which represents the highest figure in the last ten years.

The 22@ district is continuing at record levels for another year. According to the Marketshot report from the real estate consultancy firm Cushman & Wakefield, the district closed 2017 with a total of 86 rental operations, spanning a surface area of 101,000 m2, which represents the highest figure in the last ten years and 34% more than in the previous two years. This leasing figure accounted for 30% of the total office space leased in Barcelona and was led by pre-lease operations, such as the case of Amazon in the Luxa Silver building (10,241 m2), Activision (King) in Ciutat de Granada 150 (8,837 m2), Hewlett-Packard in the building located on c/Tanger 62 (8,132 m2) and WeWork in the Luxa Gold building (6,572 m2).

Potential tenants in the district are mainly looking for sustainable, high-quality spaces. In this sense, 78% of the surface area leased belongs to buildings with A or B+ ratings. The district had only 60,000 m2 of space available at the end of the first quarter of 2018, which represented a 15% decrease in the available surface area in one year and an availability rate of 7%. If we take into account high-quality buildings only (those with A and B+ ratings), the percentage of available space in the 22@ district decreases to 5.7%. Leasing levels recorded at the moment and forecast for the next few months support the development of new properties.

The 22@ district currently has 129,000 m2 of space under construction, scheduled to be handed over between the second half of 2018 and 2019. The potential space for offices in the district amounts to more than 800,000 m2, of which 350,000 m2 is located on finalist land.

Investor interest in the district broke all records in 2017. In terms of investment volumes, the 22@ district received total investment of €161 million, which tripled the €51 million recorded in 2016. In square metres, the investment volume amounted to 173,000 m2, well above the figure at the end of 2016, which amounted to 33,000 m2.

New construction in the area has reactivated in recent months, due to the type of demand and, to a large extent, the growth in rents. On the basis that this trend is going to continue, there will be an impact on capital markets, where we will start seeing operations again soon.

Flexible and coworking spaces are enjoying an unprecedented boom in Barcelona at the moment. The rise in coworking spaces in the city is clear and during the first six months of 2018, 52% more space was leased in this segment than during the whole of 2017.

In Barcelona, the 22@ district is still the main hub of innovation in the city, attracting technological companies, startups and the digital eco-system. The main coworking operation this year, amounting to 4,500 m2, was completed in 22@ and these types of spaces already account for 3.5% of the constructed stock in the district (…).

Original story: Mis Oficinas 

Translation: Carmel Drake

Office Inv’t in Madrid & Barcelona Rose by 70% in YTD Sept

27 November 2017 – Eje Prime

Madrid and Barcelona are continuing to take advantage of the boom in the office market. The sector, which accounts for 28% of all (tertiary) real estate investments in Spain, has its national breeding ground in the country’s two largest cities. During the nine months until September, the leasing of office space increased by 70% with respect to the same period in 2016, pushing up rental prices and also, reducing the available stock to a minimum. The forecasts indicate that the sector will close 2017 with a total of 780,000 m2 of space leased in Madrid and Barcelona alone: 460,000 m2 in the Spanish capital and 320,000 m2 in the Mediterranean city.

The leasing of office space grew by 21% in the third quarter in Madrid, where the leasing of workspace exceeded the 100,000 m2 threshold during the quarter to reach 102,000 m2. This increase is stimulating the sector, which by year-end may equal the total space leased in 2016 (450,000 m2).

In the Spanish capital, the central business district (CBD) continues to be the location of choice for companies, with an occupancy rate that accounts for 50% of the whole city. Between June and September, 73 operations were signed in Madrid, in other words, fewer than the 90 contracts that were signed during the same quarter last year, according to a report compiled by the consultancy firm Cushman & Wakefield.

In Barcelona, by contrast, the leasing of office space decreased by 56% during the third quarter (…) to 56,700 m2. On the other hand, of the 291 operations closed between June and September in the city, only 6% exceeded 2,000 m2; instead, contracts for spaces measuring less than 500 m2 predominated (61%), resulting in an average leased surface area of 900 m2. Similarly, in the Catalan capital, where the cumulative absorption has increased by 12% in 2017 compared to 2016, technological companies are the most active, accounting for 39% of the office space rented in the Mediterranean city, ahead of the industrial sector (11%).

The 22@ district, an area of constant growth, is home to 46% of the offices of companies headquartered in Barcelona. The rest are located in the centre (36%) and on the outskirts, where 18% of companies are situated.

Two of the largest operations carried out in Spain in the last quarter in this tertiary sector featured WeWork, one of the main players in the coworking segment. The US company leased 6,500 m2 of surface area in the Luxa building in the 22@ district of Barcelona and another 5,500 m2 of space at number 43 on Madrid’s Paseo de la Castellana.

90% occupancy rates

One of the challenges for the office sector in 2018 is going to be increasing its stock. Currently, the availability of space in Madrid and Barcelona is at minimum levels. In the Spanish capital, the supply of workspace has decreased to 12% of the total land constructed for that purpose, whilst in Barcelona, the figure is even lower, at 8%.

To this end, the plan for next year is to incorporate 139,000 m2 of new stock in the Catalan city and 80,000 m2 of space in Madrid. This lack of space has driven up rents, which are currently priced at €32/m2/month in the prime areas of the Spanish capital and €22.75/m2/month in Barcelona.

Original story: Eje Prime (by Jabier Izquierdo)

Translation: Carmel Drake