The take-up of office space in Madrid reached 110,000 m2 in Q2 2016, representing an increase of just over 25% compared to the same period last year. This is the first time in many years that the take-up is more than 100,000 m2 in a single quarter. In half yearly terms we are talking about 219,500 m2 of take-up of office space.
The strength of take-up reflects the increase of business activity in Madrid.
Approximately 110 deals were signed during Q2 2016, representing seven consecutive quarters with a figure in excess of 100 contracts. During the period 2009-2014 the average hovered around 88 contracts.
The most significant deal during this period amounted to 8,000 m2. This means that a relatively solid level of take-up can be maintained with transactions averaging around 950 m2.
Average rents have risen in Madrid's four sub-zones (CBD, Centre, Decentralised and Outskirts). The general average rent has likewise increased by some 13% in annual terms, reaching €15/m2/month. For its part, the Decentralised zone saw the greatest take-up (42% of the total) and the greatest increases in rents (at around 30% year-on-year). The idea that the decentralised zones are gaining in prominence has been reinforced along with that of the reversal of the trend seen during the crisis, in which the majority of contracts were closed within the M-30 ring road.
Prime rents have also received a push upwards, although they remained at €29/m2/month during the second quarter. The outlook for a gentle recovery in rents and the scarcity of quality office space makes property development more attractive. New build projects are awakening ever greater interest of developers and, for 2018, a new 33,100 m2 office project on the Campo de las Naciones has been announced.
Available floorspace continues to fall in the face of the lack of office deliveries and the strength of take-up over the last two years. The vacancy rate at the close of June stood below 15% and the trend continues to point downwards.
The labour market continues to pick up, the latest employment statistics being positive. Unemployment is at its lowest level since September 2009 and it is anticipated that it will continue to fall.
Office map Madrid