Savills: Spanish office sector recovers, investments up 50%

The office sector is alive and well in Spain: new Savills research shows that Madrid and Barcelona’s office markets are continuing their recovery and investment volumes for Spanish offices reached almost €2 billion in 2024, a 50% increase compared to the previous year.

“We expect to continue to see more large transactions this year thanks to the stability of the Spanish market, strong macroeconomic indicators, and the implementation of remote working policies,” said Hipólito Sánchez, executive director of offices, Savills Spain. “We are starting the year on a highly positive note, which is reflected in the return of institutional capital and a high number of transaction processes.”

Of the nearly €2 billion investment volumes, €1.1 billion was concentrated in Madrid, €510 million in Barcelona, and €384 million in the rest of Spain. A quarter of the total was allocated to change-of-use transactions, primarily in Madrid.

The Catalan capital saw a 22% year-on-year increase in take-up to 289,000 sq m, while Madrid recorded a 30% increase to 570,000 sq m in total in 2024.  

Madrid recorded 39 leasing transactions exceeding 3,000 sq m in 2024, including 19 deals over 5,000 sq m and six over 10,000 sq m.

“Large transactions have returned to Madrid, driven by the space requirements of major corporations, with deal sizes not seen since before the pandemic,” said Ángel Estebaranz, national director of offices, Savills Spain.

Due to the shortage of prime office space in the city centre, take-up in the inner periphery increased for the first time in three years, accounting for a third of total transaction volumes. Meanwhile, the city centre, including prime areas, CBD, and urban zones, represented 47% of the total, while outer peripheral areas declined to 19% share of take-up.

Looking ahead, 296,500 sq m of additional supply is expected in 2025 and 2026, with new developments accounting for only 31% of this total. Given the reduction in stock due to change-of-use conversions, there is a need to continue repositioning large office buildings in Madrid’s city centre to meet growing demand for high-quality space in the medium term, Estebaranz said.

In Barcelona, large-scale transactions were also a key driver of activity: 18 deals exceeding 3,000 sq m were signed in 2024, compared to just eight in 2023.

Demand has become more balanced across different areas. New business districts accounted for 43% of total take-up, prime and city centre areas for 47%, while peripheral areas declined to 15%. Flexible office space accounted for around 10% of total take-up in Barcelona, double the 2023 figure, which signals a return to pre-pandemic levels. 

New office development activity has dropped sharply, to one-third of the average for the past three years, with only 44,000 sq m of new space planned for 2025.

At the same time, the number of office refurbishments has tripled, with over 115,500 sq m planned for 2025, three times the average of the last three years. This refurbishment activity aims to modernise Barcelona’s office stock, maintaining its competitiveness against other European markets.