Barcelona's office market will see further growth in lettings activity in 2010 following a take up in Q4-09 that was double that of the previous quarter. According to international real estate advisor Savills, large occupiers such as AXA and Cofely have paved the way for further activity, whilst a drastic reduction in office supply should see consolidation of rents in the latter part of 2010.
Savills report outlines that of the 500,000 m² anticipated pipeline for 2010, only 236,000 m² will be realized of which 36% is prelet. This development correction will prevent significant rises in the vacancy rate of 10.2%, a level that has not been recorded since 1996. Following handover of new developments in mid 2010, office rents, which have been falling for six consecutive quarters and stand at 20 m²/month at present, will stabilise as the market absorbs stock which will not grow in a significant form until at least 2012.
Eusebi Carles, head of Savills Barcelona, says: "The year 2009 has been dominated by unheard of levels of economic uncertainty, a factor which without doubt has influenced many business decisions in the real estate market. 2010 should bring greater levels of certainty, which in turn should contribute to improved performance of markets in all facets."
Office take up in Barcelona fell by 30% during 2009 when compared to 2008. The first quarter recorded the weakest performance but take up improved thereafter reaching a peak of 99,800 m² in Q4-09, which accounted for 40% of the annual total area leased throughout the year. New districts such as Plaza Europa have already signed tenants as these districts, alongside out of town locations, and are popular with companies who are trying to reduce costs.
In terms of investment, the year closed with 626 million total office investments in Barcelona, a -40% decline from 2008. Scarcity of secure product has resulted in investors looking at alternative locations.