2025-02-18-莱坊-Spain_Offices_Snapshot_Q4_2024_2页_580kb

Offices Snapshot Summary - Q4 2024

Core Content

The Offices Snapshot report for Q4 2024 provides an overview of the office market in Spain, with a focus on Madrid. It highlights the strong growth in office occupancy, investment trends, and prime rent developments, based on real data and market analysis by Knight Frank Spain experts.

Main Points

• Occupancy Growth:
  Office occupancy in Madrid has shown strong growth, with a quarterly absorption of 111,740 sq m in Q4 2024, bringing the annual total to 555,000 sq m, which is 10% higher than the average of the five years prior to the pandemic (2015-2019).

  • The attendance rate in Madrid remains the highest in Europe.
  • The impact of remote work has been less significant than expected, with companies continuing to prioritize physical office presence.

• Prime Rent Increase:
  The prime rent in Madrid has increased to €40/sq m/month, driven by the shortage of available spaces within the M-30.

  • Strong demand for quality office spaces is expected to continue, with a gradual increase in prime rent anticipated in the coming years.

• Occupancy Deals:
  The top three office occupancy deals in Q4 2024 were:

  • 13,565 sq m by Ernst & Young in Orense, 2
  • 6,075 sq m by OCA Global in Basauri, 7
  • 5,870 sq m by ONECOWORK in Prim, 12

• Occupancy by Macro Zones:

  • CBD: 50% of the take-up, with the highest prime rent at €44.0/sq m/month
  • Out of Town: 24% of the take-up, with a prime rent of €16.75/sq m/month
  • Descentralised: 18% of the take-up, with a prime rent of €22.0/sq m/month
  • Secondary Centre: 8% of the take-up, with a prime rent of €31.5/sq m/month

• Investment Market:

  • The total office investment in Spain in 2024 was close to €1.7 billion, with Madrid accounting for over 65% of this amount.
  • 70% of the national investment was in buildings primarily used as offices, while in Madrid, the proportion was 50%.
  • Within Madrid, 90% of the investment was concentrated in the M-30 area, due to its high demand for quality spaces with good accessibility.

• Investment Trends:

  • The increase in investment focused on land-use changes is a response to space optimization and aligns with new market demands.
  • Prime yields remain at 4.25% in Madrid and 4.50% in Barcelona.

• 2025 Outlook:

  • The positive trend in office occupancy is expected to continue in 2025.
  • Private capital remains active in the main European cities.
  • Transactions are likely to occur in the second half of 2025, particularly in areas outside the M-30 with good connectivity.
  • The market is expected to balance between assets inside and outside the M-30 as prime rents rise and spaces become scarcer.

Key Information

• Office Investment in Spain:

  • Total investment in 2024: €1.7 billion
  • Madrid's share: >65%
  • National investment in office buildings: ~70%
  • Madrid's share of office-focused investment: ~50%

• Office Investment in Madrid:

  • M-30 area accounts for ~90% of the investment, reflecting its high demand and prime location.

• Prime Yields in Europe (Q4 2024):

  • Dublin: 5.25% (=)
  • Praga: 5.50% (=)
  • Paris – CBD: 4.15% (↓)
  • Brussels: 5.25% (=)
  • Vienna: 5.00% (=)
  • Munich: 4.30% (=)

Summary

The Madrid office market is experiencing strong occupancy growth, with annual absorption reaching 555,000 sq m, surpassing pre-COVID levels. This growth is attributed to the limited impact of remote work, and companies are still prioritizing physical office presence. The CBD remains the most sought-after area, with prime rent at €40/sq m/month, while prime yields are stable at 4.25%. Investment in Madrid is concentrated in the M-30 area, where 90% of the investment is recorded, due to high demand for quality office spaces. For 2025, the positive trend is expected to continue, with increased activity in areas outside the M-30 that offer good connectivity and amenities. The investment market is responding to space optimization and new market demands, and the methodology for measuring office investment has been updated to include assets with use changes.

Contact Information

• Bernardo Gómez-Arroyo, Director/Head of Offices
  +34 600 919 162
  bernardo.gomez@es.knightfrank.com

• Raul Vicente, Associate, Head of Office Agency
  +34 600 919 023
  raul.vicente@es.knightfrank.com

• Daniel Caprarin, Head of Research, Marketing & PR
  +34 600 919 087
  Daniel.caprarin@es.knightfrank.com