According to the latest Barcelona Office Report by international real estate advisor Savills, having moved from 4.00% in Q3 2007 to 6.25% in Q1 2009 yields for prime assets have remained constant over the last nine months which, has generated a window of opportunity for discerning investors to acquire prime properties at attractive prices.
Eusebi Carles, investment director at Savills Barcelona, comments: "It is thought that the Spanish commercial property market may now be bottoming out following the summer break and what has arguably been one of the worst performing semesters since the first half of 1994. We are now seeing strong interest from those investors looking to take advantage of this brief window of opportunity where prime product now appears to be attractively priced."
With regard to the occupational office market in Barcelona, Savills' report shows that the first three quarters of 2009 have been characterised by the lowest office demand values of the last 10 years with take-up for the first semester standing at 111,000 m² (1,194,833 ft²), reflecting a 42% decrease compared to the same period in 2008. The average vacancy rate in Barcelona is confirmed by Savills as 9.8%, which has increased by 150,000 m² (1,614,639 ft²) of new stock (only 70% available) being delivered in the first three quarters of 2009. The increase in vacancy rates have been particularly prevalent in the New Business Districts and Decentralized areas due to the development of new schemes prior to the economic crises.
One area that, according to Savills, has remained resilient and is attracting improved occupier appetite due to its continued popularity is the 22@ district, which accounted for 35% of take in Barcelona so far this year.
In terms of rents, Savills advises that following six years of continuous growth, decreasing demand together with the rise in supply have placed downward pressure on rental values for the fifth consecutive quarter. Prime rents currently stand at 21.50 per sq m (1.9 per sq ft) in Barcelona, which represents a 4.4% fall compared to Q209 and a 23% fall from the peak of the cycle.
Frédéric Stravraky, office agency director at Savills Barcelona, says: "In the current climate landlords are increasingly recognising the importance of flexibility, while tenants are understanding that a long-term view is necessary when negotiating deals. However, there remains a dislocation of expectation between both parties."