Spain Office Real Estate Market Size (2024 - 2029)

The Spain Office Real Estate Market is experiencing a dynamic landscape influenced by recent economic shifts and the aftermath of the COVID-19 pandemic. Despite challenges such as a decline in non-residential investment and adjustments in sale prices and transaction volumes, the market's capacity remains robust. The Madrid and Barcelona office sectors have shown resilience with significant activity in office space transactions, reflecting a steady demand. The positive trends in the Spanish labor market and increasing office occupancy rates contribute to a favorable environment for the market's expansion.

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Market Size of Spain Office Real Estate Industry

Spain Office Real Estate Market Summary
Study Period 2020 - 2029
Base Year For Estimation 2023
Forecast Data Period 2024 - 2029
Historical Data Period 2020 - 2022
CAGR 4.00 %
Market Concentration Low

Major Players

Spain Office Real Estate Market Major Players

*Disclaimer: Major Players sorted in no particular order

Spain Office Real Estate Market Analysis

The size of the Spain Office Real Estate Market is USD 2.10 billion in the current year and is anticipated to register a CAGR of over 4% during the forecast period.

  • The COVID-19 pandemic significantly affected how the Spanish office real estate market has been performing recently. The crisis has specifically caused a significant drop in non-residential investment and a correction in sale prices, transaction volumes, and new finance activities. Spanish real estate investment trusts with a focus on this sector have also been impacted, both in terms of the number of new vehicles issued as well as the value of their stock prices and real estate assets. In contrast, there has not yet been a major decline in credit quality associated with the commercial real estate market.
  • The Madrid market added 384,000 m2 of office space in the first nine months of 2022, and 308 letting contracts were completed, indicating that recent months have seen solid activity in the office sector. In this way, the surface area and operation levels for the entirety of 2021 were met in the first three quarters of the year.
  • In Barcelona, the use of office space increased to over 254,000 sq m in the first nine months of 2022 through about 250 deals. This statistic is approximately 9% higher than that for the same period in 2021 and roughly average for the previous five years. In this third quarter, Barcelona had a take-up of 91,000 square meters, a 24% decrease from the same period last year.
  • The strong pulse of the Spanish labor market in recent quarters has been evident in the office sector as well. The number of office-based employees is expected to maintain its good growth rate, above 3%, in 2023. This dynamism, along with the rising office occupancy rate, has resulted in a favorable backdrop in demand for office space.

Spain Office Real Estate Industry Segmentation

An office is a space where an organization's employees perform administrative work to support and realize objects and goals of the organization. The office real estate market includes activities related to the buying, leasing, and construction of office buildings. 

The report provides a complete background analysis of the Spain office real estate market, which includes an assessment of the economy, emerging trends by segments and regional markets, significant changes in market dynamics, a market overview, and company profiles. The report also covers the impact of COVID-19 on the market. Spain's Office Real Estate Market is Segmented by Key Cities (Madrid, Barcelona, Valencia, Seville, and Other Cities). The report offers market size and forecasts in value (USD billion) for all the above segments.

By Key Cities
Madrid
Barcelona
Valencia
Seville
Other Cities
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Spain Office Real Estate Market Size Summary

The Spanish office real estate market is experiencing a period of recovery and growth, following the significant disruptions caused by the COVID-19 pandemic. The market has shown resilience, with Madrid and Barcelona leading in office space activity. In Madrid, substantial additions to office space and a high number of letting contracts indicate a robust demand, while Barcelona has also seen an increase in office space usage, albeit with some fluctuations in take-up rates. The market's recovery is supported by a strong labor market and rising office occupancy rates, which have created a favorable environment for demand. High-quality office buildings continue to dominate the market, with a significant portion of absorption attributed to A and B+ grade structures, reflecting companies' preference for premium spaces.

The investment landscape in the Spanish office real estate market is characterized by a mix of global and regional players, with major firms like Savills Spain, CBRE, and JLL actively participating. The market is highly competitive, and despite some challenges, it is expected to regain normalcy. Madrid's office investment market has shown promising signs of recovery, with significant investments made in the first half of 2022, although the volume of large transactions remains limited. The prime yield in the Central Business District remains stable, despite upward pressures from macroeconomic indicators. The market's fragmentation and the presence of a strong pipeline of projects suggest ongoing opportunities for growth and investment, as companies continue to adapt to evolving market conditions.

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Spain Office Real Estate Market Size - Table of Contents

  1. 1. MARKET INSIGHTS AND DYNAMICS

    1. 1.1 Market Overview

    2. 1.2 Market Dynamics

      1. 1.2.1 Market Drivers

      2. 1.2.2 Market Restraints

      3. 1.2.3 Market Oppurtunities

    3. 1.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 1.3.1 Bargaining Power of Suppliers

      2. 1.3.2 Bargaining Power of Consumers / Buyers

      3. 1.3.3 Threat of New Entrants

      4. 1.3.4 Threat of Substitute Products

      5. 1.3.5 Intensity of Competitive Rivalry

    4. 1.4 Industry Value Chain Analysis

    5. 1.5 Technological Innovations in the Office Real Estate Market

    6. 1.6 Government Regulations and Initiatives in the Industry

    7. 1.7 Insights into Rental Yields in the Office Real Estate Segment

    8. 1.8 Insights into the Key Office Real Estate Industry Metrics (Supply, Rentals, Prices, Occupancy/Vacancy (%))

    9. 1.9 Insights into Office Real Estate Construction Costs

    10. 1.10 Impact of the COVID-19 on the Market

  2. 2. MARKET SEGMENTATION

    1. 2.1 By Key Cities

      1. 2.1.1 Madrid

      2. 2.1.2 Barcelona

      3. 2.1.3 Valencia

      4. 2.1.4 Seville

      5. 2.1.5 Other Cities

Spain Office Real Estate Market Size FAQs

The Spain Office Real Estate Market is projected to register a CAGR of greater than 4% during the forecast period (2024-2029)

Savills Spain, Cushman & Wakefield, CBRE Spain, Avny Group and Actividades de Construcción y Servicios are the major companies operating in the Spain Office Real Estate Market.

Spain Office Real Estate Report Snapshots

SPAIN OFFICE REAL ESTATE Market Size & Share Analysis - Growth Trends & Forecasts (2024 - 2029)