Marketbeat Offices offers an analysis on the current Madrid office market, supply, demand, investment and trends within the Real Estate sector. The fourth quarter of 2017 closed with 108 lease contracts. This figure is relatively high, exceeding the standards of the new cycle in that the average stands at 90 deals.
The vacancy rate saw out the quarter at 11%, 300 basis points lower than one year ago. The majority of vacant floorspace was located in the Decentralised zone, where the rate stood at 14% at the close of the quarter. The CBD and Centre achieved rates of 8% and 6% respectively, the lowest for the city. The volume of stock increased by 39,000 m2 over the last three months. The future supply over the coming year amounts to some 105,000 m2, the majority of this being speculative in nature.
The active demand for floorspace has taken average rents in the fourth quarter to €15.00/m2/month from the €13.50/m2/month seen one year ago. This backs up the idea that the gap between prime and average rents is narrowing. Nevertheless, the prime rent in Madrid reached €33/m2/month in Q4, some 10% above the figure one year previously. Incentives remained the same, amounting to one month for each year of binding compliance. The greatest rent growth was seen in the CBD, due to the scarcity of product, particularly high spec. product. Nevertheless, contagion is expected in other zones, particularly those decentralised areas with a quality offering.