Demand for office space in Madrid dropped in the first quarter of 2012, while rents are also declining in the city.

According to the latest Savills Market Report on Madrid offices, take-up dropped by 20 per cent in the three months from January to March, compared to the same period in 2011.

The firm predicted rental falls, which have mostly been seen outside the central business district (CBD), are likely to continue and affect the CBD, with new space coming on to the market later this year expected to push rents lower.

Meanwhile, a report published earlier this month by IPD revealed returns on Spanish commercial real estate were down by 3.2 per cent in the first quarter.

However, there has been increased investment in office assets so far this year, with the sale of the Torre Picasso building at the beginning of 2012 generating more money than was raised by all office transactions during 2011.

Pontegadea, the real estate vehicle for Inditex Group, acquired the skyscraper for €400 million (£322 million), with Savills noting there is the possibility that a further €450 million worth of deals could be completed by the end of 2012.
 

source: http://www.propertyshowrooms.com/spain/property/news/take-up-rents-fall-madrid-s-office-market_312196.html

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