The effects of the pandemic have been noticeably felt in the office leasing market in Barcelona. Throughout 2020, companies in the city leased a total of 170,000 square meters, 57% less than in 2019, a year that was considered a record.
The year 2020 has been very different, with a 57% decrease as a consequence of the business uncertainty caused by the COVID crisis, which has established teleworking and emptied offices, in addition to postponing many investment decisions or corporate headquarters relocations. In fact, the bulk of the fall is a consequence of the sharp reduction experienced by rental operations of more than 3,000 square meters.
Large companies are now rethinking what office model will be necessary in the future and many SMEs have already reduced or directly given up their physical spaces to cut their expenses at a time of sharp fall in income.
"Everyone takes for granted that flexibility and teleworking are here to stay; however, I think that what is going to arrive and stay is still an unknown," says the CEO of Savills Aguirre Newman, Jaime Pascual-Sanchiz. According to the real estate expert, "in this situation, making a hasty decision can be a mistake for companies" and assures that the casuistry on what to do with offices "will be different in each type of company and must be linked to the productivity generated by its workspace."
In any case, the real estate consultancy recommends office owners to improve their management models to provide them with greater flexibility so that companies can adapt contracts to their needs. "The sector must evolve to be able to compete and attract companies that are looking for a new headquarters or location," emphasizes Savills Aguirre Newman.
According to this firm, throughout 2021 the office supply in Barcelona will increase by some 260,000 square meters, of which 42% correspond to new developments in the 22@ district. This figure will increase in 2022, when developers expect to place another 328,000 square meters on the market, 78% also concentrated in 22@. Savills, however, admits that part of the supply planned for next year might not materialize because, given the current context of crisis and pandemic, "it is possible that delivery will be delayed to later years."
Although demand in 2020 plummeted, the office vacancy rate, that is, the percentage of square meters that are available, remains low. Specifically, the availability ratio has risen to 5.9%, compared to 4.29% in 2019. This contained increase, Savills points out, is due to the limited incorporation of new projects in 2020. For this same reason, the decrease or correction of rents in all areas has not exceeded 4% year-on-year.