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Madrid and Barcelona, first and third cities of Europe where office rents to grow until 2020

The levels of business for offices, combined with the scarcity of high quality product, continues to put soaring pressure on office rents in Madrid and Barcelona, just as the last report on offices presented by the consultancy JLL predicted.

In the case of Madrid, maximum rents in the business district (CBD) were 28 €/m2/month, while in the secondary zone they went up to 16.5 €/m2/month. Only on the periphery and in satellites, did they remain stable at 14.24 €/m2/month and 10.5 €/m2/month, respectively. For its part, Barcelona has experienced a strong increase in rents in all zones: from 6.5% in Paseo de Gracia/Diagonal (21.2 €/m2/month); 7.46% in the CBD (18 €/m2/month); 6% in new business areas (17,5 €/m2/month) and 18.75% on the periphery (9,5 €/m2/month).

Thus, JLL’s predictions indicate that this tendency will continue. In fact, Madrid will be the European city where office rents will rise most during the next few years, with an average annual increase of 5.7% from now until 2020, whilst Barcelona will be in third place with an increase of 4.9% per annum, behind Stockholm..

Of the 6,200 million euros invested in tertiary assets so far this year, offices represent 25% of the total, with a total volume of investment of 1,572 million over the past none months. This involves a fall of 28% in respect of the year before, but the third trimester has been an especially good period for the office market, as it is just in these last three months that deals were closed to the value of 764 million euros, 28% more than the previous trimester

The reason for the lower result compared to last year lies, according to José Miguel Setién, Director of the Offices sector at JLL, in the lack of quality product on the market, able to satisfy the standards of the investors.

Madrid concentrated 70% of investment between July and September, with 539 million euros, all located in the CBD. In Barcelona, the volume of investment during the last trimester was 225 million euros, an increase of 58% compared to the previous trimester.