Office-market figures from 2020 describe a historical snapshot rather than current conditions. For Madrid, check whether the source covers the whole city or one submarket. Use the percentages to understand that period and check recent data for the city and submarket before making a present-day decision.
This article examines Madrid’s office market using 2019–2020 data. Those figures provide historical context but do not necessarily describe current availability. Check recent evidence by location and building grade before making a property decision.
Current Madrid office vacancy rates
It is important to note that 2020 has yet to fully unfold in regards to commercial opportunities, so the rates highlighted in this article may be subject to change. However, data procured in the latter half of 2019 observed vacancy rates of just below six per cent. Note that this is in direct contract to average European rates of approximately seven per cent. Most believe that lower rates within Madrid and other Spanish cities such as Barcelona have arisen from the fact that both locations are thought to represent excellent opportunities for startup firms. When we then take into account relatively low rental costs when compared to other major commercial hubs, it becomes clear to appreciate why Madrid represents an appealing opportunity for many businesses.
What do the experts predict in the future?
One interesting variable to address involves the relatively small volume of available of commercial space (particularly within the CBD and the interior of the M30 motorway. While the current supply is relatively low, several construction projects are expected to increase the amount of space throughout 2020 and 2021. Thus, it is reasonable to expect vacancy rates to become slightly more flexible.
However, the full impact of the current corona virus outbreak has yet to be realized. Many experts believe that the toll of this pandemic upon businesses will be quite severe. This may lead to decreased demand and therefore, higher vacancy rates than would be observed within a normal economic climate. To put it simply, the rates associated with the latter half of 2020 and throughout 2021 are far from clear at the present.
Madrid is nonetheless a vibrant commercial hub and it is clear why so many businesses are keen to leverage the available opportunities.
How to assess the current market
Compare the reporting date, location, building quality, effective rent, service charges, incentives and lease term. Distinguish marketed space from space that is ready to occupy, and use sources that apply the same definition of vacancy.
How to use historical property data
Compare figures only when sources use the same definition, reporting period and geographic boundary. Direct vacancy, sublease space and marketed availability can produce different percentages. A current leasing or investment decision also needs recent asking rents, incentives and information about the quality of available buildings.
