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2017 / iberian.propery // 57
ISSUE: TOP IBERIAN Investors //dossier
MADRID
: the take-up volume of 87.000 m² in the first quarter of 2017
represents a 13% decrease comparedwith the same period the previous
year, according to Cushman &Wakefield. The greatest share of net take-up
in the quarter was by companies in the technology sector. Nonetheless,
estimates indicate that total take-up in 2017 will be around 450.000 m².
With the vacancy rate at approximately 13% at the end of the first quarter,
205.800 m² of new supply are expected to be completed until the end
of the year, 145.000 m² of which represent regenerated spaces and the
remaining 60.800 m² are new build. Although it still carries relatively
low weight, the development of new construction projects is now be-
ginning to grow, and there is greater investor interest in turn-key and
speculative projects.
The average rent increased 1.6% compared with the previous quarter,
now standing at 31 €/m² / month. Forecasting that there will be a re-
duction in vacancy in 2017, the consultancy estimates that rents will rise
between 8% and 10% in the prime segment and 3% to 5% in peripheral
areas throughout this year.
According to figures by C&W, investment in office assets increased 58%
compared with the first quarter in 2016, rising to 240 million euros, with
SOCIMIS standing out once again as the principal investors. Likewise,
national investors also led purchases in the first quarter, representing a
70% share of the volume invested. Yields continue to contract, reaching
3.5% at the end of the quarter.
LISBON
: reflecting an annual growth of 34% compared with the same
period the previous year and 62% above the quarterly average of the past
five years (26.932 m²), the 43.641 m² taken up in the first quarter does not
reflect the current market demand. This because, like in 2016, although
demand continues to grow – driven above all by the strong momentum
of the BPO sector – it is heavily restricted by the lack of available offer. A
situation that JLL expects will endure for the next couple of years, and
which will result in a decrease in the vacancy rate and a rise in rents.
The vacancy rate continues to drop in 2017, reaching 10.1% at the end of
the quarter with almost every zone recording a decrease. During that
period, prime rents continued to rise in several market zones, currently
at 18.5 €/m² for the Prime CBD and 15.5 €/m² in Parque das Nações,
where there is virtually no available space.
Regarding future supply, JLL estimates that until the end of 2018, 96.600
m² of new stock will enter the market, distributed across eight new
buildings, half of which already have guaranteed occupancy.
BARCELONA
: in the first quarter of the year, 78.000 m² of offices were
taken up in Barcelona, 14% more than in the same period the previous
year. Led by companies in the IT & Telecommunications and Services &
Professional Services sectors, demand continued to show strong mo-
mentum in this period, with activities remaining 10% above the average
of the last ten years, reveals Cushman & Wakefield.
Currently, the vacancy rate in the Barcelona market is 8.7%, and it may
continue to drop over the next months due to a lack of new stock en-
tering the market, while demand remains robust. It must be noted that
no new project was completed in the first quarter, and the consultancy
estimates that, except for regeneration projects, no injection of stock
generated through new development will take place in Barcelona until
2018. Looking at the pipeline of new offer due to be concluded until
2019, Cushman highlights the entry of 70.000 m² in the @22 zone and an
additional 19.500 m² in Zona Franca, namely Torre Marina by Iberdrola.
The market’s activity and decrease in vacancy is driving rental values in
Barcelona which, particularly in the best buildings, have maintained an
upward trajectory since the end of 2014. Currently, the prime rent is at
22 €/m²/ month, 7.3% above the values practiced a year ago.
Regarding investment, and maintaining the trend observed in 2016,
the first quarter was marked by the completion of seven investment
operations involving offices, totalling a volume of more than 400 million
euros. Prime yields reflect the growth in economic activity, reaching 3.5%
in the CBD at the end of the quarter, while in the New Business Areas it
stood between 4.5% and 5%. A differential that, Cushman concludes,
«is
attractive for investors who seek modern spaces in excellent locations, and
we expect this trend to remain over upcoming months»
.
Mapfre Tower, Madrid