1. Barcelona office market
Q3 2011
Annual gross take-up Annual change in vacancy rate
Source: Savills Research Source: Savills Research
“Market trends continue to be determined by the turmoil affecting
the financial markets. This is shaping decision-making for both
occupiers and investors who have adopted additional precautionary
measures until the markets stabilise and a trend becomes more
evident.”
Eusebi Carles (General Manager Barcelona)
Office take-up has declined considerably this The complete absence of new projects being
quarter (just over 43,000 sqm) compared to the delivered in the market is continuining to gradually
figure for the same quarter in 2010 (60,700 sqm). help to stabilize office supply and to slow the
Although demand in the third quarter of the year vacancy rate upward trend.
is traditionally low, the overall trend in the market
indicates that 2011 will register the lowest level of Rental values continue to fall, with prices dropping
gross accumulated take-up of the decade. in almost all of the areas studied, albeit at a
slower pace than in the previous quarter. On a
Speculative developments have virtually quarterly basis, prime rents have declined by
disappeared from the market. No projects were -2.6%.
completed in the third quarter of the year and we
do not expect any significant new projects to be There is a widespread caution among investors.
delivered over the next 15 months. The volatility in the financial markets, the political
climate in Europe, difficulties accessing finance
and a lack of quality product at acceptable sale
prices are hampering decision-making.

2. Economy, demand and supply
Economy Hence, we estimate that gross take-up for the end of
the year will not exceed 250,000 sqm (levels similar to
The spotlight with regards to the global economic those achieved in 2009 and almost 30% below the
climate remains firmly trained on the European average for the past 10 years).
sovereign debt crisis. The pressure of financial markets
on Italy has overshadowed the Greek Odyssey. The Compared to previous quarters, the Periphery has
cost of Italian debt has reached record highs become particularly relevant during the summer
dangerously above 7.0%, which was the point at which months. Three out of the nine most important
bailouts began in Ireland, Greece and Portugal. transactions were undertaken in Periphery areas: the
Political issues in the country are making market multinational firm Adidas let over 1,400 sqm in
uncertainty worse and this is affecting risk premium, Vallsolana Garden Business Park in Sant Cugat del
which is currently around 550 base points (bps), whilst Vallès, the telecommunications company Colt Telecom
the Spanish premium is hovering dangerously close to expanded its offices in the WTC Almeda Park in
500 bps. Cornellà de Llobregat (3,320 sqm) and the fashion
brand Rosa Clará will move to a new 5,000 sqm
building in Sant Just Desvern.
Long-term government bond yields (10 years)
Activity in the office market continues to be affected by
firms’ cost savings strategies, either looking for lower
rents or for more efficient buildings, which would allow
them to significantly reduce costs. The latest strategic
relocation completed in Barcelona has been Unilever
moving from a prime CBD building to Viladecans; this
has freed up space in l’Illa Diagonal, which is one of
the most prestigious buildings in the city. This is a good
current example of the psychological change in terms
of demand for offices; the location of the property is no
longer a key factor for many companies, which can
forgo this in order to achieve other necessary
objectives. Given this, vacant obsolete properties in the
city centre have a clear objective: they must renovate
their offices or they will not be able to survive in the
Source: Eurostat & Bloomberg market.
The extent in the situation of Europe is forcing us to
imagine a situation where China would have to Supply and vacancy rate
intervene, therefore becoming Europe’s banker and the Office supply in Barcelona remains unchanged in the
potential repercussions that this could have. third quarter of the year due to the complete absence
GDP growth in Spain is becoming increasingly weak of new developments in the market.
and this could lead to stagnation or even a double-dip
recession at the end of the year. The weakness of the
Vacancy rate by sub-markets
economy is clear when one looks at most supply and
demand economic indicators. However, the most
significative aspect of the economy is still the gloomy
job market situation - 144,700 people were made
redundant in the third quarter, putting the
unemployment rate at 21.5%.
Letting market
Demand & take-up
Office demand in Barcelona continues to suffer the
consequences of uncertainty in the market and the
economic downturn. Take-up between July and
September slightly exceeded 43,000 sqm, which is
19% lower quarter-on-quarter and up to 29% lower
Source: Savills Research
year-on-year. To date, gross accumulated take-up has
reached 174,700 sqm, which highlights the weak As we anticipated in our previous report, no significant
performance of the market, reaching minimum levels speculative projects will come onto the market within
achieved over the past decade. the next 15 months, although two office buildings are
being refurbished in the city centre: the first is located
Barcelona office market -Q3 2011 2

3. Rents & investment market
on Calle Calabria and is owned by Núñez y Navarro move to these premises due to the lack of adequate
and the second is located on Travessera de Gràcia public transport infraestructure. As a result employees
and is owned by Colonial. are reluctant to move to these areas.
The majority of developer activity within the next few Incentives (rent free periods, temporary rental
months will take place in the Nova Bocana complex, discounts and help with fit-out costs) are becoming
where the company of the same name is developing important factors when negotiating contracts.
three office buildings where the future headquarters of
Desigual and Fundació Pascual Maragall are expected
to be located. In total, both head offices amount to a Investment market
total of 30,000 sqm.
The sale of the Diputació 260 building by Pontegadea
The lack of new projects has become a stabilising to IVG in August has been the only significant
factor in the market and this is curbing the growth of transactions this quarter. This is certainly a very small
the vacancy rate, which is currently at 13.3%. The volume in a market which was used to registering over
0.1% quarter-on-quarter increase is essentially in ten transactions per quarter just four years ago.
response to more second hand offices becoming Annualized investment volume has fallen to €224
available. million, which highlights the extent of the decline in
activity in the market, with volumes falling by around
Rents 90% compared to the market highs achieved in 2007.
After a period of relative rental price stability in the final
months of 2009, rents have continued to trend Annual investment volume
downwards since the beginning of 2010. Rental levels
have fallen quarter-on-quarter in all areas analysed,
however it is important to highlight that they have fallen
moderately if we compare the figures to those at the
beginning of the recession period (2008-2009).
Accordingly the prime rent has fallen 2.6% to
€18.50/sqm/month, which is similar figures in the 22@
district, where rents have fallen by 2.8%.
Quarterly prime rents
Source: Savills Research
The volatility in both financial markets and the political
climate in Europe has caused investors with capital to
set aside to invest in offices to err on the side of
caution and they are analysing the situation further.
If we add this to the fact that there is not much quality
product in the market at sale prices reflecting these
levels of uncertainty, the combination of these two
factors has severely affected the flow of investment.
Source: Savills Research
Rental levels in the City Centre and the Periphery have
been more flexible, with a 4.4% and 4.3% fall
respectively. Owners with properties in these areas
study the possibility to renew their rental strategies, but
for different reasons. In many cases, properties located
in the city centre are gradually losing their
competitiveness due to their obsolescence compared
to a vast stock of new and more efficient buildings
located in the New Business Areas and the Periphery.
However, on the other hand, when faced with the
considerable number of modern offices in the
Periphery, it is more complicated for firms to decide to
Barcelona office market -Q3 2011 3

4. Barcelona office market
Survey map
For further information, please contact:
Eusebi Carles Frédéric Stravraky Josep Garcia Andrew Stevens Muna Benthami Eri Mitsostergiou
Director Barcelona Office Agency Corporate Valuations Research Barcelona Research Europe
+34 93 272 4100 +34 93 272 4100 +34 93 272 4100 +34 93 272 4100 +34 93 272 4100 +31 (0)20 301 2087
ecarles@savills.es fstavraky@savills.es jgarcia@savills.es astevens@savills.es mbenthami@savills.es emitso@savills.com
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