Madrid office take up during Q210 rose threefold to 160,000 m² compared to Q209, according to international real estate advisor Savills, with H110 take up at double the total for H109.
The data shows that of the deals completed in Q210, three 'mega' deals (over 10,000 m²) took place involving tenants Spanish Airports and Air Navigation (AENA), Alcatel and AMPER. Of particular note, outside the popular city center, the east area of the city saw 17% of transactions with significant lettings between 6,000 m² and 9,000 m². Meanwhile a rise in owner occupier sales appeared to be on the increase with over 10% deals closed.
In terms of investment, Savills reports H110 volumes stand at 7% higher than H109, with hot demand for prime office assets such as Paseo de Recoletas 3 and 56% transactions focused within the M-30. The average investment volume rose from 15 million Q1 to 34 million in Q2.
Luis Espadas, Capital Markets Director, says: "One of the most significant investment deals lately, Paseo de Recoletas 3, has set a new record for the length of negotiation period at two months. It has also exceeded the previous records for yield and price/m² set in recent years. The number of buyers reflects the demand for this type of asset in the market."
Savills finds that despite the steady growth in the investment markets, rents are not yet rising in fact in the CBD they remain at the same levels as Q110 showing averages of 28 m²/month and 29 m²/month but outside this area rents continue to fall. Year-on-year rental falls in the submarkets range from -11% to -20%. Average vacancy rates outside the CBD now stand at 12% but in CBD they have fallen to 7% from 11% in Q110. In Q210 CBD registered 10% of take up due to a letting to Banca Civica for 7,000 m², and this has allowed CBD vacancy level to revert back to its characteristically lower rate than average vacancy for the city.
Luis Espadas continues: "We anticipate that national investors will continue to focus on Madrid's CBD for the second half of the year as with its vacancy rates below market average, it will continue to be the 'safe haven'.