The office market in Madrid saw one of its best years in over a decade in 2019, driven by a significant increase in leasing and investment. Demand for quality spaces remains high, while available supply has dropped considerably, standing at around 10% overall and falling below 4% in the city’s financial center.
Madrid continues to consolidate itself as an attractive destination for company headquarters, especially foreign firms, hosting nearly 40% of all foreign companies operating in Spain. This strength is reflected in notable deals such as Amazon’s lease of 6,800 m² on Paseo de la Castellana and Gala Capital’s signing of 5,600 m² in Serrano, demonstrating the sector’s positive momentum.
According to Knight Frank’s report, office investment reached 4 billion euros in 2019, a 65% increase over 2018, with Madrid capturing more than 2.3 billion euros—surpassing Barcelona. CBRE confirms this trend, citing a low vacancy rate of 9% across the city, and even lower at 3.7% in the financial district, with an absorption of 654,000 m² during the year, the highest since 2007.
Experts highlight that the market is characterized by high liquidity but a shortage of product, both in low-risk (“core”) assets and medium-to-high risk (“value add”) assets. This, along with limited new project supply, supports rising rents across all areas of the capital.
Building refurbishment is emerging as a key strategy to increase the supply of quality office space and sustain the sector’s growth in Madrid, which remains an economic engine and a focal point for foreign investment in Spain.
