Offices, market data Madrid and Barcelona - Figures first quarter 2024 Spain

Good start to the year for the national office market. The dynamism of the sector in the first three months of the year reaffirms the interest of companies in locating in the best buildings and anticipates a year in which greater activity is expected in the sector. Hiring in this first quarter in Madrid and Barcelona, the two main markets, is 42% higher than that recorded in the same period of 2023 and is also 23% above the average for the first quarter in the last five years.

Madrid opens the year with the best quarterly figure since 2019, with the contracting of 148,000 square metres, a year-on-year growth of almost 40%. The average contracted area goes from just 850 square meters in 2023 to 1,150 square meters, without taking into account the main operation so far this year, the renovated 20,000 square meter Colón Towers. Barcelona, on the other hand, is also starting 2024 strongly, with almost 100,000 metres contracted, which is an improvement of 60% compared to the same period last year. This is the second best quarter for the Catalan market since the beginning of the pandemic, driven largely by the return to the market of large operations, with an average contracted area that goes from 800 square meters to 1,200 square meters.

In terms of investment, the first three months of 2024 start with a decrease in large real estate investment operations, which translates into a decrease of 31% compared to the first quarter of the previous year. Even so, we observe two growing trends that accumulate 468 million euros; the acquisition of offices for own use (€440M) and the purchase for change of use (€20M), which amounts to more than €600 million in office assets. On the national front, Barcelona has been the focus of investment in this first quarter, accumulating 68% of the national total, with an increase in the occupant appetite for the purchase of owned buildings. Regulatory rigidity is limiting the possibilities of reuse of offices to other alternatives.

The stabilisation of interest rates by the ECB has mitigated the upward corrections in office prime yields, which now stand at 4.80% in Madrid and 5.00% in Barcelona. The market is still keeping an eye on the possible rate cut, which will lead to a compression of yields in the medium term.