The Madrid Office Market Strengthens Its Recovery in 2024

The Madrid office market has strengthened its recovery in 2024. Office leasing in the capital has reached a total of 538,000 m² over the year, representing a 23% growth compared to 2023, according to the latest report by FORCADELL.

In this regard, the report highlights that the recently closed financial year has been marked by significant transactions, an increased physical presence of employees at company headquarters, and the growing prominence of decentralized areas, with key operations driving their development.

At the same time, the market has maintained a dynamic of high commercialization and stock reduction due to the repurposing of buildings. This scenario also implies that the city has a low available stock, with a vacancy rate of 9.8%.

Providing a global analysis of the year, Manel de Bes, Director of the Office Department at FORCADELL, highlights “the strong data presented in the report, which confirms the recovery of Madrid’s office market throughout 2024.”

Adding to this positive outlook, de Bes states that “FORCADELL’s report outlines optimistic forecasts for this year, positioning 2025 as a good year, with a strong start, marked by stable leasing activity.”

Q4 2024 Exceeds Expectations with 130,000 m² Leased

Regarding Q4 2024, office leasing in Madrid has surpassed forecasts during this period, reaching 130,000 m², which represents an 82% increase compared to the 72,000 m² recorded in the same period of 2023.

In terms of geographical distribution, 52% of the square meters leased in this last quarter have been concentrated within the M-30, despite the area’s limited availability. This is even considering that more than 310,000 m² of office projects are under construction for the coming years, as noted in the report. Low availability and strong demand have continued to drive rental prices upward in central areas.

As previously noted in past reports, peripheral and decentralized zones continue to gain importance in leasing activity, representing 48% of the total during this period. In fact, these areas have hosted significant transactions throughout the year, indicating that companies are increasingly considering more affordable locations with buildings offering a wide range of amenities for users and high sustainability certifications.

Regarding office rents in decentralized and peripheral areas, incentives such as high financial contributions and extended rent-free periods are being observed, as long as asking rents remain unaffected.