The hiring of office space in Azca reached 32,000 m² in the first nine months of the year, more than in all of 2018 (30,700 m²), according to the first Marketshot report by Cushman & Wakefield dedicated to the Madrid business district. The current stock of Azca is 473,100 m² and there is no room for further increases, while space availability has increased from 14.7% in 2016 to 4% in 2019. This evolution represents a decrease of more than ten points in three years.
The demand for offices in this submarket was reactivated as of 2015, when it registered 32,500 m², of which 19,775 m² corresponded to the arrival of EY to Torre Titania. That year marked the beginning of a new cycle (2015 - 2019) in which the average annual hiring has stood at 29,000 m², almost three times higher than that recorded between 2008 and 2014 -12,000 m².
In 2017 the hiring reached 41,400 m², which was a new record in the historical series. It should be noted that in that year three buildings that had been renovated were returning to the market: Castellana 77, 81 and 95. Among the three they attracted 77% of the 2017 demand. In 2018 the inertia was maintained, although with some symptoms of exhaustion That this year they have disappeared.
“AZCA remains the most attractive area for companies in the office market in Madrid, both in occupation and in rehabilitation and construction quality of real estate. It is a reference for other submarkets, and this is reflected by their prime income, which is in line with the maximum income that is given in the city,” explains Alfredo Collar, Partner and Director of Business Space Agency Offices of Cushman & Wakefield.
By contracted surface size, operations between 300 and 750 m² predominate, representing 41% of the contracts signed since 2017. Operations with surfaces of more than 4,000 m² have been more common in recent years, due to the type of offer available. Despite these figures, the good dynamics of space absorption will be conditioned in the short term by the small area that is available, which is currently 17,000 m² (spread over 10 buildings), of which good quality is only 14,000 m² spread over seven buildings.
The hiring of office space in Azca reached 32,000 m² in the first nine months of the year, more than in all of 2018 (30,700 m²), according to the first Marketshot report by Cushman & Wakefield dedicated to the Madrid business district. The current stock of Azca is 473,100 m² and there is no room for further increases, while space availability has increased from 14.7% in 2016 to 4% in 2019. This evolution represents a decrease of more than ten points in three years.The demand for offices in this submarket was reactivated as of 2015, when it registered 32,500 m², of which 19,775 m² corresponded to the arrival of EY to Torre Titania. That year marked the beginning of a new cycle (2015 - 2019) in which the average annual hiring has stood at 29,000 m², almost three times higher than that recorded between 2008 and 2014 -12,000 m².
Quality offer through rehabilitations
In total, between rehabilitations and new construction, 154,500 m² of offices have raised their level of qualities in Azca in the last eight years, representing 33% of the stock of this submarket. Specifically, Castellana 79 was reformed in 2011 and, a few years later, in 2013, the works of Torre Titania were completed, which consisted of completely rebuilding the Windsor Tower. Torre Picasso, the building with more surface of Azca , has not undergone a deep reform, but improvements that have allowed it to have levels of rent similar to the city's prime.
A similar case is that of the Alfredo Mahou tower which, without having been fully rehabilitated in recent years, the improvements made have allowed it to adapt to the needs of the tenants. As of 2016, several properties began to be rehabilitated: Castellana 77, 81 and 95 increased the level of their qualities with comprehensive reforms, and there are currently other reforms underway, such as Castellana 83-85, or pending, such as the Sollube building and the Growth building. There is still space with potential in this area, since there are at least 20,000 m² of quality C offices.
Coworking, booming
The consolidation of this office area has also attracted flexible space operators. Since 2015, almost 128,485 m² of coworking offices have been contracted in the Madrid market within the M-30 motorway. The Azca submarket has been where most of that volume has been concentrated , with 16.4%, followed by the Chamartín area , with 13.2%.
“The accelerated growth of the share of flexible spaces in recent years shows the potential of this sector and Azca has differentiating characteristics such as the proximity to one of the most important public transport centers in the capital and an outstanding commercial and commercial offer. restoration", says Daniel Caprarin, Senior Analyst Cushman & Wakefield and author of the study.
Income increase
The exits to the market of the buildings that had improved their qualities and increased the benefits coincided with a change in the preferences of the demand that looked for better spaces for the employees. As a consequence, and coinciding with the decrease in space availability, prime income increased from € 24 / m 2 / month in 2014 to € 28 / m 2 / month in 2016. Azca's prime rent is expected increase 1.5% in 2020 and 1.4% in 2021, taking into account that this year it will close at a level of € 34.50 / m² / month.
