Offices have become one of the most profitable types of real estate for investment in Spain in 2022. According to the Finanzas portal, last year the profitability from renting out offices reached 12.9%. The profitability of these assets contrasts with the profitability of the commercial segment as a whole (9.6%) and, especially, the housing market (7.2%). However, these are still very good indicators. Garage assets demonstrate similar levels of profitability — 7.1%.
In view of this, the Spanish office sector has become a safe haven for investors. It is predicted that the popularity of offices will only grow. In 2022, they have already raised 2.56 billion euros. According to Savills in the Spanish capital, Madrid, investments in offices took a share of 51% of all funds invested in commercial real estate. In Barcelona, the capital of Catalonia, the share of offices has stopped at 37%. The most popular are offices located in the city centers. The newer and more environmentally friendly the building, the higher the demand for it.
Let's look back at other cities in Spain. The offices located in Seville offer the highest profitability — 13.4%. Seville's closest rivals in terms of profitability are Zaragoza (10.8%), Albacete (10.6%) and Almeria (10.3%). Bilbao and Santa Cruz de Tenerife (6.2% in both cases), La Coruna and Cordoba (6.3% in both cases), as well as Pamplona and Ourense (6.6% in both cases) offer the lowest profitability for offices).
Demand for office space in Madrid increased by 30%
Madrid is one of the Spanish cities with the highest demand for offices. The price for them is growing extremely fast, which leads to a decrease in profitability. Last year, it already amounted to 6.6%. In 2022, demand "absorbed" about 543,000 square meters of office space. This is 30% more than was recorded in 2021.
Angel Estebarans, head of the Savills office in Madrid, points out: "By October last year, we had reached the indicators of the end of 2021, and the last quarter was especially positive, as it was marked by two of the largest transactions on the market. With the stabilization of the pandemic situation, more and more companies are returning their employees to their offices and demand is growing".