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Barcelona Office Leasing To Grow in Q4

BARCELONA, SPAIN-Only about half of the 5.4-million-square-foot pipeline of new office development will be built in 2010, which should keep vacancy at around 10%.

By Allan Saunderson | Updated on March 04, 2010

BARCELONA, SPAIN-Barcelona’s office market will see further growth in lettings activity in 2010 following take-up in the fourth quarter, at double the previous quarter. A report by international real estate advisor Savills says that large occupiers such as AXA and Cofely have paved the way for further activity, while a drastic reduction in office supply should see consolidation of rents in the latter part of 2010.

Of the 5.4-million-square-foot pipeline for 2010, only 2.5 million square feet will be realized, of which 36% is pre-let. This correction will prevent significant rises in the vacancy rate of 10.2%, a level not recorded since 1996. Following handover of new developments in mid 2010, office rents, which have been falling for six quarters and stands now at $2.73 per square foot, will stabilise as the market absorbs stock that will not grow in a significant form until at least 2012. Eusebi Carles, head of Savills Barcelona, says, “The year 2009 has been dominated by unheard of levels of economic uncertainty, a factor which without doubt has influenced many business decisions in the real estate market. 2010 should bring greater levels of certainty, which in turn should contribute to improved performance of markets in all facets.”

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