Office
In the first half of 2020, a space take-up of 138,400 sq m has been achieved in the Madrid market, of which 48,240 sq m have been absorbed between April-June. Given the context of exceptionality in the second quarter of 2020 demand has performed weakly, and comparisons with previous periods may be misleading. As a reference, the quarterly average for the last 3 years stood at 136,000 sq m in the first half of 2020, a space take-up of 88,940 sq m has been achieved in the Barcelona market, of which 44,000 sq m have been absorbed between April-June. Given the exceptional circumstances in the second quarter of 2020 demand has performed weakly, and comparisons with previous periods may be misleading. As a reference, the quarterly average for the last 3 years stood at 95,260 sq m.
Industrial
Vacancy rate stands at 8.2% (764,000 sq m) in Madrid after new additions registered in Q2 2020. 76,000 sq m were delivered in Meco and Getafe. The pace of construction activity is being maintained and it is estimated that by the end of 2020 the stock of logistics warehouses will grow by around 547,000 sq m (4% already committed). The logistics stock of Barcelona and its area of influence amounts to 7 million sq m with a vacant area of 327,000 sq m. The low level of availability is well known in the prime area, at only 23,100 sq m, giving a vacancy rate of 1.8%. Operators find it difficult to locate in this area and, as a result, turnkey projects have been a suitable option for them since 2019. The second ring of logistics operations houses the majority of vacant space with 126,000 sq m (5.7% vacancy rate).
Investment
The first half of the year saw the implications of the Q2 lock-down and investment volumes shrank at levels not seen since 2013. Although we have surveyed investors’ appetite for Spanish real estate assets with positive readings since May, such intentions have not materialised in new deals. In part this is explained by the physical hindrance to performing technical inspection and due diligence. As a result, Q2-2020 saw an annual change in investment volumes of -44%. However, a strong pace in investment in Q1 meant that the first half of 2020 grew by 4%.
Retail
Within the current context of the New Normal, the adaptation and adjustment of stores is proving key to keep on attracting the public to stores. Our recent retail survey in Spain (with more than 2,000 participants) shows that high street shoppers accord great value to high hygiene standards. At the same time, shoppers give priority to proximity retail and convenience stores.
