According to the latest research by international real estate advisor Savills, total take up in the Madrid office market reached approximately 385,000 sq m in 2013, which represents a 35% increase year on year.
According to the latest research by international real estate advisor Savills, total take up in the Madrid office market reached approximately 385,000 sq m in 2013, which represents a 35% increase year on year.
Ana Zavala, head of office agency in Madrid, comments: “The growth of the corporate sector and increased occupier confidence has helped boost take-up from the 285,000 sq m that was recorded in 2012. However, the 2013 figure was distorted by several mega-deals such as Vodafone taking space at Avenida de America 115 Business Park therefore, whilst we believe we are on the road to recovery, we predict that it may be several years still until we are up to the long term average of 500,000 sq m. In 2014 we forecast that take-up will slightly exceed 2013 levels reaching approximately 400,000 sq m.”
Savills finds that office occupiers continue to show a clear preference towards central locations compared to out-of-town areas, with over 53% of the space taken in 2013 within the M-30 ring road. The firm also states that the professional service sector remains the most active accounting for 35% of take-up in Madrid.
The vacancy rate continues to stand at around 14% according to, Savills, although the CBD and the more consolidated areas recorded between 4% and 6%. In line with this low vacancy level, rents have increased in the CBD for the first time in five years standing at €24.75 per sq m, which is up 1% on 2012.
Savills reports that growing investor appetite has helped increase total investment volumes slightly to €500 million in 2013, 3% higher than 2012, which was close to €485m.
Luis Espadas, head of capital markets, adds: “The improvement in economic expectation has restored investor confidence in the whole of Spain and Madrid has benefited from this. Whilst so far the effect has been marginal, 21 deals in 2013 compared to 19 in 2012, we do predict to see continued improvement throughout 2014.”
The involvement of international funds in Madrid’s office market has increased, according to Savills, from 33% in 2012 to 55% in 2013, 81% of which were from European countries. The firm finds that France, the UK, Germany and Switzerland were the countries with the most active investors in Madrid.