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10 April 2018 – El Periódico
During the first three months of the year, 76,000 m2 of office space was leased in Barcelona. That volume, which represents an increase of 4% with respect to previous quarters, is the highest seen in the last nine months, which means that, despite the political tensions, activity in the city’s office market is performing well. According to a report from CBRE, “companies are moving for very specific reasons and the appeal of Barcelona means that activity remains high. Currently, several large companies are evaluating new locations for their offices, which means that the forecast in the short and medium term for leasing remains good”, said Lindy Garber, Head of the Office Area at the real estate consultancy firm.
The most notable operations recorded during the first quarter include the rental of 6,500 m2 of office space by the Property Registrars in the BCN Fira District complex on Paseo de la Zona Franca; the move by the company Norwegian Air to Nike’s former offices on the Mas Blau industrial estate, where it is going to occupy 5,400 m2; as well as Pepsico Iberia’s move to its new offices spanning 4,900 m2 in the WTC Almeda Park complex. Like in most large cities, Barcelona is seeing an increase in demand from companies offering co-working space.
The volume of surface area available in the market continues to be low for another quarter. In the last year, the availability rate has decreased from 12.5% to 10.3%, and there is a shortage of large, high-quality spaces. Although several projects have been handed over in recent quarters, they have not been added to the new supply, since they were pre-leased before they even came onto the market. This practice is gaining ground due to the lack of available product in the market. On the other hand, the entry onto the market of Torre Glòries added around 27,000 m2 of available space in one of the most sought-after areas of the city, the 22@ district. Prime rents, which have risen by 35% since 2014, are continuing their upward trajectory, and now amount to €24/m2/month. Although that figure is still well below the peak of €28/m2/month reached in 2008, the rising trend is expected to continue in the medium term.
Investment market
During the first three months of the year, the office market recorded an investment volume of €121 million thanks, above all, to the purchase of Axiare by Colonial. This represents an increase with respect to the previous quarter when the investment volume amounted to €66.5 million. Nevertheless, despite the improvement in the investment figure with respect to the previous quarter thanks to the aforementioned operation, the political uncertainty is undoubtedly having an impact on the investment market.
Xavier Güell, Director of this area in Barcelona for CBRE, said that “during the last quarter of last year, investors suspended operations that they had underway because of that uncertainty; many returned to their purchase processes at the beginning of this year, but they remain cautious. Given that these processes require a certain amount of consolidation time, the operations will not be reflected in investment volumes until the second or third quarters”. Prime yields remain stable at around 4.25%.
Original story: El Periódico (by Max Jiménez Botías)
Translation: Carmel Drake