Overview of Spanish Office Market in 2020
Investment volume in the Spanish office sector in 2020 reached circa €2,000 million, (-c.52% vs. 2019), a sharp decline explained by: 1) the unusual big size of some transactions in 2019, and 2) due to the impact of the severe covid-19 sanitary and economic crisis in 2020 (despite a partial recovery in investments in Q4 2020).
Prime CBD rents have contracted slightly in Madrid and Barcelona, (-c.3% and -c.4% vs. 2019), standing at c.€35.0/sq.m./month and c.€27.0/sq.m./month, respectively. Prime yields have remained stable vs. 2019 at 3.25-3.50% and 3.50-3.75% in 2020, respectively. Prime offices have been perceived by investors as a safe investment due to the security of their cashflows, concentrating 86% of total office investments. Core and core plus assets are resisting well the Covid-19 impact, while yields in value added and opportunistic assets increased. Take-up figures during 2020 in Madrid and Barcelona were affected by the uncertainty caused by the pandemic, lock-down and remote work measures. Take-up in Madrid and Barcelona accounted for 500,000 sq.m., 51% lower than in 2019 vs. an average 38% fall in Europe.