Madrid is the 2nd European city to see a major spike in the office rental market

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

The Spanish capital will see an increase in prices of 4.6%, the highest in Europe only surpassed by Athens. Barcelona for its part will grow to 2.2%

The Madrid office market is in top form. The Spanish capital will be the second European city where revenues from the office market will grow the most until 2024, with an annual growth of 4.6%. Only Athens exceeds it, with an annualized growth of 5.1% over the next five years.

For its part, the shortage of supply will limit this growth in Barcelona, ​​where rents are expected to grow by 2.2% each year until 2024, at the same level as Frankfurt and above cities such as Hamburg, by 1.3%, or Rome, 1.7%, according to the study published by Nuveen Real Estate.

The authors of the report highlight that the prices in both cities are the great candidates to continue growing in the coming years. In contrast, cities such as Berlin, Amsterdam or Stockholm show already high incomes, which makes it difficult to maintain growth in the coming years.

Despite this, it is expected that the office rental market in the continent as a whole will continue to grow at a good pace during this 2019 thanks to a solid demand and an offer that can respond to the new needs. However, the increase in office rents, which has grown by more than 10% per year in many cities in recent years, may slow down after 2020.

At the European level, Munich, Berlin and Copenhagen are in the second tier with growth of 3% every year until 2024, while cities such as Manchester and London will see their income grow about 1% annualized because of Brexit and instability politics.

Another factor that causes rents to grow below expectations in cities such as Brussels or Barcelona is the shortage of supply, which causes a contraction of the market.

On the other hand, it is expected that the sectors that create more demand for new office spaces will be the new technologies and the creative sectors, in addition to service operators. In this sense, the Catalan capital is one of the best positioned cities in Europe thanks to the so-called effect of the district of 22 @, while Madrid, where the office market is more disintegrated, seeks solutions to create its own technology district.

This article was written and published in Spanish and has been translated into English via Google Translate. Click here to read the original article.

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