Madrid’s office market has begun to show symptoms of recovery in Q1 2021, fuelled by recent good news regarding Covid-19 (advances on vaccination plans and a reversal in telework) with total take up reaching c.91,000 sqm, the best figures since the beginning of the Covid-19 pandemic.

Prime CBD rents stood at c.35.5 €/sqm/month (-c.2% vs Q1 2020) due to an increase in offer and wariness of companies when signing new lease contracts. The average rent suffered a slight decrease to c.15.5 €/sqm/month, as companies are signing new leases in more peripheral areas with lower quality and rents, being the A-1 axis the most sought-after area, accounting for c.30% of total take up.

Madrid prime CBD yields ended at c.3.5% (+c. 25 b.p.) whilst Prime CSD (Central Secondary District) yields stood at c.4.5%. Total investments in the Q1 2021 in the Madrid Office Market amounted to only c. €75 million (c.26% of total office investments in Spain), being the most relevant transactions the acquisition of two fully leased buildings in the A-6 axis by two French institutional investors.

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