Take-up in H1 2014 reached just over 190,000 sq m, which is a 14% y-o-y decrease, although if we disregard the Vodafone letting (50,000 sq m) signed at the beginning of 2013, the difference would be +11%.
Demand is beginning to show moderate signs of improvement, with a 15% increase in the number of transactions completed.
The overall market vacancy rate continues to touch on 14%.
Demand activity will dictate just how much the vacancy rate will alter, but despite the expected increase in take-up between now and year-end and the drop in the amount of new and renovated space, we do not expect to see the vacancy rate fall significantly, as many of the mega-deals signed over the past few months are still yet to vacate their old headquarters. We are now in a two-tier rental market. Whilst the CBD, its immediately surrounding areas and the main business parks are seeing positive growth, the areas furthest from the city centre continue to see rents fall.
The Madrid office investment market is coming out of its slumber. Between January and June, Madrid registered close to €450m of investment, accounting for just over 60% of all office investment in Spain.
International capital accounted for almost 60% of this, thanks to the acquisitions of the Vodafone headquarters and the IBM headquarters, both of which were sold for over €100m.
The entry of Socimis on to the scene will favour a more upbeat investment market, which will continue to be extremely active up until the end of the year.
Source : Savills