OFFICE MARKET MADRID AND BARCELONA - monitorimmobiliare.it

Economic and offi ce cycle
m 2
1,200,000 16
1,000.000 12
800,000
600,000
400,000
200,000
0 -8
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011*
*Accumulated
Q I Q 2 Q 3 Q 4
Quarterly take-up by area
m 2
350,000
300,000
250,000
200,000
150,000
100,000
50,000
0
Take-up (m 2 ) Vacancy rate (%) GDP var. (%)
take-up Average
10,000
2006 2007 2008 2009 2010 2011
Transactions by business sector
Services IT Industry Retail Finance Legal-consulting
Public Sector Leisure & culture Logistics-Distribution Other
11%
8%
14%
5%
23%
35%
8
4
0
%
-4
Source: BNP Paribas Real Estate Research
Source: BNP Paribas Real Estate Research
Source: BNP Paribas Real Estate Research
PROPERTY REPORT - OFFICE MARKET MADRID AND BARCELONA - Q3 2011
MADRID 2011
Take-up
The stagnation in economic activity in Spain continues to limit
the job market and, therefore, the take-up of office space. To the
end of September 2011 take-up of office space in the Spanish
capital totalled 234,000 m², around 77,000 m² less than in the
same period in 2010. The main driver of take-up continues
to be the rationalisation of costs. However, the availability of
quality office space at low prices has led to some deals.
Annual take-up growth in the third quarter reached 19%, which
can hardly be interpreted as an improvement given the current
market conditions. The growth, in fact, was due to the low
65,500 m² taken-up in the third quarter of 2010.
The average surface area was 1,100 m², outstripping those of
the previous four quarters, which averaged 850 m². This was
because the five largest operations of the quarter accounted
for 50% of total take-up. As a reference, the average pre-crisis
deal size (2004-2007) was around 1,200 m² each quarter. The
surface per operation is 630 m² after omitting these large
deals, more in line with the average sizes of offices rented
since 2009.
The two most outstanding operations were by the Ministry of
Justice (temporary headquarters for the National Court) and
the technology company Indra, with 8,500 m² and 8,300 m²,
respectively.
There were 72 transactions in the third quarter, 26 less than
a year ago. This compares to the average of 150 transactions
between 2004 and 2007, and the failure to exceed 100 deals is
a feature of 9 of the last 11 quarters.
In the breakdown of operations by sector, Services and
Information Technology lead the ranking with 35.4% and 23.1%,
respectively. It should be noted that all the operations during
the quarter by IT companies have been in the Decentralised
Zone (area of Julian Camarillo) and Outskirts (Alcobendas and
Las Rozas). There were 6 transactions by the Public Sector in
2011, accounting for a respectable 11% of the surface area
take-up in the year. In addition, based on current demand, it is
possible that more government agencies will continue to take
up space during the next few quarters.
In the breakdown of operations by zones, the Centre and
Outskirts each account for a third, of take-up. They were
followed by Decentralised (20%) and lastly CBD (15%). Thanks
to the volume of the operations by the MInistry of Justice and
Indra, the CBD and Decentralised Zone increased their share
in the distribution of surface area, balancing the volume in
each area.
The outlook for the last quarter of the year points to a lack
of surprises with take-up of around 90,000 m². With this,
2011 will close with approximately 70,000 m², a decline
from 2010. We will have to overcome an uncertain 2012
start: the presidential elections, the new measures of fiscal
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