The Office Market resurges in Madrid and Barcelona
After months of uncertainty and crisis generated by Covid-19 pandemic side effects, the office market resurges. The demand for office spaces in main cities of Spain is starting to return to its ordinary motion. This is due to the growing vaccination rates, the diminish of mobility restrictions and return of pre-pandemic economic activity.
In case of Madrid, during Q2 2021, the leasing of office spaces experienced a c.3.3% growth in comparison to Q1 2020, overcoming pre-pandemic standings. Which meant a c.31.5% increase in contrast with Q1 2021, driving demand up to c.186,000 sqm. In terms of location, areas outside M-30 (Madrid´s main ring-road) concentrated c.65% of hired spaces, in particular the decentralized zone between M-30 and M-40 (secondary ring-road) with c.33%, followed by the periphery with c.31% and the central zone with c.20%. On the other hand, the CBD (Madrid´s business district) totalled c.16% of the hiring. Lastly, average rent of office spaces in Spanish capital has slightly adjusted in past months and stands at c.€18/sqm/month, a c.5% y-o-y drop.
Speaking of Barcelona, hiring of office space suffered a drop of c.12% in contrast to Q1 2021, presenting a 68,000 sqm figure; nevertheless meaning a c.65% increase in comparison to Q2 2020. Additionally, H1 2021 reached c.81% of the total of 2020 hiring, since the registered demand rose to c.145,000 sqm. Although hiring was slightly lower than during Q1 2021, a total of 62 deals were registered during Q2 2021, five more than during Q1 2021. However, the average size of the mentioned deals barely decreased to an average c.1,100 sqm. On the other hand, the decentralized zone (c.28%) and the periphery (c.23%) concentrated c.51% of Q2 2021 demand, while 22@ zone concentrated 19%. For their part, the central areas of Barcelona (CBD and historical centre) accounted for c.30% of the demand. In terms of rent, Barcelona has experienced for three months in a row an adjustment, standing at c.€16.5/sqm/month.