Spain: Madrid’s Office Market Continues to Boom

02.08.2019 - Steven Rudmann

Investors’ on-going interest and high demand for office properties have caused rents for office space to sky rocket in the Spanish capital. According to recent studies on the European market for office properties, rental prices for office space will continue to rise until 2024 by up to 4.6% per year.

Madrid ranks second behind the Greek metropolis Athens, whose annual growth in office rents is forecasted to reach 5.1%. According to these studies, German cities like Berlin or Munich are predicted to reach yearly growth rates of up to 3.1% for office rents.

The demand for office space in Spain’s capital has proven quite strong in the current year, as the vacancy rate dropped to 9.5% in the first semester of 2019.

The forecasts for Barcelona paint a similar picture: yearly rent increases of up to 2.2% can be reasonably expected, even though according to the recently published market studies the trend is not as dynamic as in Madrid. Barcelona recorded a vacancy rate of 5.1% for the first semester of 2019.

One of the strongest driving forces behind the high demand for office space in Spain this year is the coworking sector. While the average space rented by coworking providers amounted to 1,250 m2 in 2014, it has tripled since then, reaching an average space of 3,800 m2 this year.

All in all, investors will continue to see opportunities for profitable transactions in the Spanish office sector in Madrid and Barcelona.

For further information: Steven Rudmann