In 2020 office contracting dropped more than 50% in Madrid and Barcelona

In 2020 office contracting dropped more than 50% in Madrid and Barcelona

Under this situation, the prime rent in Madrid at the end of 2020 was set at 34.5 €/ sqm /month, whereas Barcelona closed the year with a prime rent of 27.75 €/ sqm /month. In both cases, this represented a 3% y-o-y drop.

The data is from Cushman & Wakefield, which further recalled that despite the drop, we need to take into account that 2019 was historical in terms of demand in both cities and that it closed with very robust fundamentals in the office segment.

Despite the drop in 2020, Madrid hosted the largest operations, more than 8 of them had more than 8.000 sqm, one more than in 2019. These 8 operations represented a total combined area of 91.115 sqm, of which 70% were contracted class A buildings (some newly built and others renewed) which «shows that companies keep prioritising buildings which comply with the highest quality standards», revealed the consultant.

Amongst the year’s most active segments, were the pharmaceutical and sanitary segment with a share within all contracting of 8.3%, IT with 16.4% and the public segment with 11.2%.

For 2021 it is expected for the total contracting numbers to increase, boosted by the current situation tenants are living while analysing their spatial needs. «It is normal that during times of uncertainty companies delay decisions. And once again, the pandemic brought a structural change to the sector, new ways of working. As we return to normal, we will see how the sector accelerates once again», assured Javier Bernades, partner, Council member and in charge of Offices at Cushman & Wakefield in Spain.

In terms of the availability rate in offices, it is around 10% in Madrid and 6% in Barcelona. According to Cushman & Wakefield, it is expected that within the coming 12 months 157.000 sqm will be added to Madrid’s stock and 210.000 sqm to Barcelona’s in the new offer (new construction/renewal offer). In Madrid, 20% of this new construction is already compromised, whereas in Barcelona 45% of these areas are already pre-leased.

In 2022 a recovery is expected to start which will lead demand to reach contracting levels in line with the historical average.

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