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1.625 million invested in the Spanish office segment
25 July 2019 | Observatorio Inmobiliario

According to international consultant Savills Aguirre Newman the Spanish office segment registered 1.625 million euro in investment during the first semester of 2019, which represents a 150% increase yoy.

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The office investment in Madrid was over 1.005 million euro during the first semester of 2019, which represents 62% of the total amount invested in Spain. International investors were the most active, followed by REITs and insurance companies.

In terms of the users’ market, during this year’s first six months, in Madrid, there was a 25% yoy increase in contracted areas, consolidating, for the third consecutive year, an absorption rate higher than the historic average and placing it at pre-crisis levels, by reaching almost 365.000 sqm in contracting.

During the first semester, the availability rate remained at similar levels to those verified during the last quarter of 2018, although there remains a tendency for decrease in the available offer with levels close to 9%, being residual in the prime area. During the first semester the availability rate remained at 3.95% in the prime axis, whereas in the Business District (CBD) it decreased to 6.63% and in the urban area to 3.93%.

 

More than 250.000 sqm in new offer in two years

The reactivation of the development activity will increase the quality offer in the Spanish capital’s market. Savills Aguirre Newman predicts that 256.000 sqm will enter the market until the end of 2020, 33% of which in the city and the rest in the suburbs, which means that the availability rate might increase in the coming months.

 

Less operations, but more contracted area

238 operations were registered during the first semester of 2019, which represents a 26% yoy decrease, however the almost 1.500 sqm of contracted areas represent a record for the Madrid market. While the operations with less than 500 sqm continue to decrease, those above 1.000 sqm are increasing. This is also the case when it comes to mega-operations (10.000 sqm) which totalled seven for the first semester of 2019, representing 38% of the whole biannual contracting, whereas during the same period last year, there was only one operation.

Concerning rents, the average rental in Madrid reached 17.90 €/ sqm/ month, which represents a 6% yoy increase, while the theoretical prime rent in the CBD reached 34 €/ sqm/ month, which represents a 6.25% increase.