The office market in Madrid has registered a take-up of 253,000 sq m in the first half of 2024, an increase of 5% compared to the same period in 2023 and 8% above the average for the comparable period since 2021, according to data from real estate consultancy JLL.
During this period, 42% of the area under contract was Grade A buildings, a significant increase compared to 32% in 2023 and 26% on average in 2021 and 2022. Decentralised areas led the way, accounting for 47% of the total, while the CBD (Central Business District) and City Centre accounted for 45%.
Prime rental prices in central areas reached €40/sqm/month, matching 2007 and 2008 levels, driven by high demand and a shortage of available product.
The flex space sector remained stable, with operators contracting at 6%, close to the 9% recorded in 2023. According to the Association of Property Consultants (ACI), positions contracted in these spaces were 9% higher than the previous year, with 2,541 positions in the first half of the year compared to 2,331 in 2023.
"Nearly half of the contracted space has been in grade A buildings, which supports the trend to go for contemporary and sustainable spaces".
Adriana Gorri, Head of Markets at JLL Spain, says: "Greater economic certainty has driven office demand in Spain during H1 2024, with a continued focus on quality assets. Nearly half of the space contracted has been in Grade A buildings, supporting the trend for contemporary and sustainable space. Furthermore, the flexible space data demonstrates that this type of space continues to consolidate its position as an alternative for companies looking for workspaces that attract employees, either because of company requirements or because they want to locate in areas where quality assets are not readily available".
In Q2 2024, the delivery to market of 39,600 sqm of new or refurbished product, mainly in decentralised areas and the City Centre, contributed to the reduction in the availability rate from 10.2% to 9.6%.
Among the most notable transactions in the quarter were the letting of 7,500 sqm in Julián Camarillo by La Universidad de Diseño y Tecnología (UDIT) and the 4,000 sqm extension in Castellana Norte signed by the Community of Madrid, both brokered by JLL.
