The spike, which is the third-best figure since 2007, was primarily boosted by a series of mega-deals, each comprising 10,000 sq m or more – examples include MásMovil, Amazon Web Services and Banco Santander. Other tenants taking space included WeWork who took two separate buildings in the outskirts of the CBD, showing a commitment to secondary areas of the city as demand outstrips supply in the city centre.
On this note, interest in secondary locations serves to highlight the importance of good quality premises; five out of the seven lettings comprised new-build spaces, recent refurbishment or were seeing ongoing works.
Ana Zavala, Director in the Office Agency Division, Savills Aguirre Newman, explains:
“As vacancy rates tighten in Madrid’s Inner City (4.7 per cent in June 2019 compared to 6.4 per cent in June 2018), occupier focus has instead moved further afield to periphery locations outside of the M-30 motorway. This trend, which is expected to continue, is simultaneously pushing rents up to between €10-€15 per sq m/month (36 per cent of all lettings) and in some instances to €25 per sq m/month. For prime locations in the CBD rents now stand at €34 sq m/month, which is an undeniable reason for heightened interest in other locations.
“What is also interesting is the decline of smaller office space available as co-working spaces continue to grow in popularity. Yes, we have the big names such as WeWork snapping up spaces between 5-6,000 sq m, however spaces that are an average of just under 4,000 sq m are also seeing further interest.”
Between January and June, nearly 92,000 sq m of space was placed back on the market with an additional 303,000 sq m of additional space expected in the next 18 months, helping to satisfy the relentless demand from occupiers for space in Spain’s capital city.