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Market report

Madrid offices - Q4 2013

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Take-up reached close to 385,000 sq m in 2013, which is a 35% y-o-y increase and the first positive growth since 2010.

One must take in to consideration that various mega lettings, such as Vodafone and Cepsa, heavily distorted this figure.

The number of transactions registered fell by 15% compared to 2012.

The overall market vacancy rate continues to stand at around 14%, although the CBD and the most consolidated areas are at between 4% and 6%. The outermost periphery far exceeds the market average, by as much as two or even three times.

For the first time in five years, closing rents in lettings signed in the CBD have increased very slightly, which justifies a 1% increase in the achievable value to €24.75 per sq m/month.

The improved economic outlook has restored international investor confidence in Spain.

The volume of investment transactions was at a similar level to 2012, about €500m, with a notable increase in international participation (55% in 2013 versus 24% in 2012).

Also of note is the increase in investment in yielding properties (80% in 2013, compared to 28% in 2012.

The imbalance between supply and demand for prime properties could drive the achievable yield in the CBD to harden.

Source : Savills