Office take up in Madrid and Barcelona falls in 2016

Take up of office space in Madrid and Barcelona in 2016 fell below 2015 levels, which was an exceptional year, according to the latest reports from BNP Paribas Real Estate.

The 2016 financial year closed with a gross total take up of offices in Madrid of 421,650 m², 15% less than the previous year. The prime rent increased by 4% and the average rent went up 10% compared to 2015. “The tendency towards rent increases is expected to continue during 2017 and 2018, as much due to the increase in business activity as for the reduction in occupancy rate. Regarding the available supply of space. This is expected to be very limited. Occupancy rates will continue to decrease in central zones such as the Castellana–Recoletos axis, Chamberí and Chamartín”, explains Daniel Caprarin, chief economist at BNP Paribas Real Estate.

According to the consultancy, quality supply in the capital is very reduced, only about 5% of available surface area is of a ‘very good’ quality, and, given the favourable turn the market is taking, there has been an observable boost in the renovation of office buildings, especially in the Azca district. It is expected that, in 2017, the Spanish economy will continue to expand. More jobs will also be created, following the take up of office space together with the consequent reduction in availability.  In Barcelona, take up reached 315,000 m², 73,000 m² less than in 2015, which was an exceptional financial year. Already rents are being pushed up in all the market zones, more strongly in the Prime zone. 2016 ended with an average rent in Barcelona 14,5 €/m²/month, 20% more than that recorded at the end of 2015. The prime rent, which in the third trimester of 2016 went from 20 tp 21 €/m²/month, ended the year at 21,5 €/m²/month.

The available surface area is decreasing in Barcelona and the availability rate is about 11.5%. The Central Business District (CBD) of the Avinguda Diagonal and Passeig de Gràcia, have a vacancy rate of 3.9%, which was the average availability rate in the years 2003 to 2007. “In regard to the supply of new areas, for 2017 it is expected 30,000 will come onto the market², commented Daniel Caprarin.