According to Knight Frank, Madrid’s occupational market has seen a particularly buoyant period, with the first nine months of 2017 registering the strongest office occupier activity in a decade, reaching 359,000 square meters.
The upturn in the Spanish economy is of course vitally linked to this increased activity; Spain’s economy is outpacing the Eurozone, with GDP growth in Q3 registered at 3.1% and forecast to move towards the pre-crisis peak by year-end.
This economic stability has led to business confidence and the creation of jobs, particularly in the professional services sector, underpinning the increasing momentum in the office market. Already having reached strong levels, office take up is expected to reach 480,000 sq. m by year-end, the second strongest year in a decade.
In response to demand and supply pressures, prime rents in the city continue to increase, reaching €29.50 in Q3 2017. These demand pressures have seen office availability fall to 11.6%, but the city’s development pipeline is now improving and around 325,000 sq. m of office space is planned for delivery in 2018-2019.