Real estate consulting firm JLL has estimated that the cost to rent office space in Madrid and Barcelona will increase 35% and 30% respectively over the next four years.
According to the company’s calculations, these will be the biggest rises seen in office space rental prices over the whole of the EMEA region (Europe, Middle East and Africa).
These two cities will also head the list for greatest rise in rental prices of industrial units in the same region, and will only be exceeded by Dublin.
The report, titled ‘EMEA Forecast’ pinpoints Madrid and Barcelona as two strategic cities and locations when it comes to businesses wanting to find new areas to locate their companies. This will result in a huge rise in rental prices as demand is high.
JLL has calculated that the cost to rent an office in Madrid will increase by 6.2% each year, going from 25.5 euro/sq. m/month during the last quarter of 2014 to 35.5 euro/sq. m/month during the same quarter in 2019. This would result in a 35% rise in prices in just 5 years.
In the case of Barcelona, JLL has estimated that office rental prices will go up 5.3% per annum, in which case they would increase from the current average price of 17.75 euro/sq. m/month registered at the end of 2014 to 23 euro/sq. m/month at the end of 2019. This would be a hike of 30% over the 5-year period.
The company has included around 20 cities in the study. Behind Madrid and Barcelona rank London and Birmingham.
Office rental prices will increase in the City by 4.3% a year, while in the West End, they will go up by 3.1%. In the case of Birmingham, the rise in prices will go up at a rate of 4.2%.
However, the cost of renting out office space will not rise in every city. In fact, some areas will undergo a reduction of prices, as is the case of Rome and Bucharest. Prices in Brussels will remain the same, and in Geneva and Zurich they will experience a slight increase.
Source: On The Pulse