The education sector has taken centre stage in Barcelona's office market in the first quarter of the year. According to data from JLL, companies that provide educational services have experienced a notable increase in demand for office space in recent months. Thus, at the close of the first three months of the year, they accounted for 27% of total hiring, compared to 7% between 2019 and 2022.
JLL points out that the digitisation of education and the deployment of the European Union's Next Generation funds to accelerate this trend are some of the factors behind the growth of education companies. In Sant Joan Despí, an education company leased almost 13,000 square metres with the intermediation of JLL, which stands out among the main operations carried out by education companies.
Technology companies reduce their office occupancy in the city of Barcelona
On the other hand, technology companies, which have traditionally led the recruitment in recent years, have been affected by the macroeconomic uncertainty and the increase in the cost of financing, on which they are highly dependent. As a result, their space requirements have reduced and now account for 9% of hiring, compared to 28% between 2019 and 2022, due to a reduction in their headcount or a slowdown in their pace of hiring.
The trend of subletting some office space is booming in major global markets and Barcelona is no exception. JLL notes that many technology companies that recently invested in office space are considering bringing some of the space back to the market through subleases.
550,000 sqm in Barcelona's office pipeline
The Barcelona office market is expected to continue to grow and increase its total stock by 7% by the end of 2025, adding up to 550,000 square metres of new or refurbished product over the next three years, according to JLL.
During the first quarter of the year, more than 80,000 square metres of new or refurbished offices were delivered, with the 22@ submarket registering the highest number of office space deliveries with 45,000 square metres.
22@ DISTRICT BARCELONA
Currently, the 22@ District leads the pipeline with almost 250,000 square metres under construction or refurbishment, which represents 44% of the total stock pending to be added to the market in the coming years.
Meanwhile, Centro Ciudad is the second submarket with the second largest office space in the pipeline in the Barcelona market, with 150,000 square metres, equivalent to 28% of the total market. The demand for quality space in this area has led to increased interest from investors and landlords in the refurbishment and repositioning of assets in this submarket.
58% of office space taken up in grade A properties
Demand for quality space has increased significantly in recent years in Barcelona, and the market is in a better position to meet these needs, according to JLL. During the first quarter of 2023, 58% of take-up was in Grade A space, compared to just 35% between 2019 and 2021.
In previous years, the lack of availability of this type of space forced many companies to pre-let space still under construction. In addition, more than 50% of all new hiring in the 22@ District in 2021 was through pre-letting. Leases of surface areas larger than 1,000 square metres occur in Grade A buildings in more than 50% of cases.
Barcelona office market: stable rents at record highs and hiring on the rise
Prime office rents in Barcelona have reached an all-time high of 28€/sqm/month, having grown by 1.8% since the first quarter of 2022. Availability has increased to 660,000 sqm, which has kept rents stable, although the City Centre submarket has seen a slight increase due to the shortage of Grade A space.
Take-up in the first quarter of 2023 was around 75,000 sqm, 7% higher than in the previous quarter, but 4.6% lower than the average for the years prior to the pandemic.
Among the most significant transactions, in addition to the aforementioned education sector company, the expansion of space carried out by the pharmaceutical company Puig in Plaza Europa, where it had already pre-let 7,500 sq m in mid-2022 and to which 6,900 sq m were added in the first quarter of this year.