IP03

2017 / iberian.propery // 33

ISSUE: TOP IBERIAN cities //dossier

OFFICES

Driven by the economy’s performance, Madrid’s office market has

been evolving quite positively throughout 2017, and may close with a

gross take-up of more than 500.000 m², surpassing last year’s results.

Driven by solid growth in demand and successive years with minimum

levels of new supply entering the market, rent values have been rising

over the past months, while investment has also made a notable

comeback due to the launch of new development projects.

270

270.000 m² |Take-Up:

gross office take-up surpassed

270.000 m² in the 1st semester, with a positive

performance in supply during the 2nd quarter.

29.00 €/m² | Rising rents:

the 1st semester

registered an overall increase in average rental

prices in every subzone of the market. Currently, the

average rent in Madrid’s prime zone is around 29.00

€/m² per month, with the maximum rent practised

in the semester reaching 35.00 €/m². Rents are

expected to maintain their upward trajectory until

the end of the year, with the greatest rises taking

place in the CBD.

Investment in development is back

| the

development of new office space is returning to

the Madrid market, and several projects are already

under construction, totalling a GLA of approximately

153.000 m².

300

300.000 m² under regeneration

| At the same time,

there is a continued commitment to regenerate

the existing stock, with at least 300.000 m² of GLA

undergoing renovation, an important contribution to

increase Madrid’s quality supply.

11% | Vacancy-Rate decreasing

| the total volume

of available stock in the market continued to drop

throughout the 1st semester, currently standing at

around 1.400.000 m². Forecasts indicate that the

vacancy rate will maintain its downward trajectory

over the next months, essentially sustained by the

positive performance of demand.

INDUSTRIAL & LOGISTICS

Displaying a favourable performance, the activity of the industrial

and logistics market in the Spanish capital continues to grow since

the beginning of the year, with the area taken up during this period

breaking the record of the past ten years.

380

380.000 m² Take-up

| in the 1st semester of 2017,

the take up of logistics spaces in the Madrid market

increased 110% compared with the same period in

the previous year, with a result that usually represents

the take-up levels for an entire year. This is primarily

due to the high number of transactions, more than

30, for large spaces during the semester.

263

263.075 m² under construction in 2017

| 74% of which

are speculative construction projects, and 26% with

guaranteed occupancy. It is estimated that 70.993 m²

were completed by the end of June.

€

5.00€/m² prime rent

| although the prime rent has

remained stable since the beginning of the year, at

the end of June, average rents in the market had

increased in comparison with the 1st semester of 2016.

,3%

2.3% annual rent growth until 2021

| in what will

be the 5th largest average annual increase in the

European logistics market.

,3%

3.30% Vacancy Rate

| The vacancy rate reached a

record low in the Madrid market in the first half of 2017.

Distribution

|The major groups in the distribution

sector have been the principal players for demand in

2017, preferring above all locations in the 1st and 2nd

market clusters. The 3rd cluster is the zone in highest

demand for spaces above 20.000 m².

Annual market appreciation of 3.5% | Madrid is expected to register

the 5th greatest average annual appreciation in Europe between

2017 and 2021

Industrial & Logistics Rents Madrid – 1st Sem 2017

€/m²/ month

Mín.

Max.

1ª Cluster

4,25

5,00

2ª Cluster

3,10

4,50

3ª Cluster

2,50

3,25

source: JLL – Fundamentales Mercado Industrial y Logística (Q2, 2017)