Madrid: Fringe as the new core
This article originally featured in Active Capital 2019.Pricing and availability constraints in the CBD are pushing investors to investigate new emerging-core locations in the capital of Spain.
3 minutes to read
As pricing of central business district assets hits new highs, while planning and availability constrain assets available for purchase, investors are seeking emerging-core and fringe-of core locations. A prime example of this is in Madrid, where a good transport network and availability of former industrial assets with looser planning is encouraging both occupiers and investors into sub-markets around the central CBD. This is supporting office investment volumes, which in Q1 2019 were circa $1.1 billion, +143% up year on year. The prime office yield for Q1 was 3.75%. Madrid is also increasingly a new gateway city, with 63% of office transactions cross border over the last twelve months, according to RCA. We provide an overview of these sub markets below.
Madrid sub market map
1 A1 AXIS
This is one of the main axis at the periphery of Madrid, home to significant business parks which can serve large corporates which need space.
2 CASTELLANA NORTE / CUATRO TORRES / MANOTERAS
With metro station, bus and road links, this area of the city is close to some of the wealthier residential areas to the north. Recent years have seen significant development of good quality assets. Auditors, Consultants and an oil company are some of the tenants located here
3 PASEO DE LA CASTELLANA
This is a major business axis for office buildings. Well located for access to the central CBD, with metro stations and other amenities along this wide boulevard running into the heart of Madrid. This is home to some of the tallest office towers in the city, including the 52 storey Torre de Cristal, home to KPMG.
4 CHAMARTÍN
In the area adjacent to the Chamartin station, this area offers a high level of services and transport. This is an area with significant future development potential. The 26 storey Gates of Europe towers, built in 1996 border the northern edge of this sub-market
5 CAMPO DE LAS NACIONES
This is one of the biggest developments of offices in the municipal district of Madrid. The area enjoys wide spaces, good transport links, including being less than a ten minute drive to Madrid-Barajas Adolfo Suárez Airport under normal conditions. This area is home to several headquarters of large companies.
6 A2 AXIS | AVENIDA DE AMÉRICA | AEROPUERTO
This area has excellent access to both the airport and central Madrid, by car and a variety of metro and bus options in the area. This area also attracts companies looking for large space and investors seeking to deploy capital into larger lot sizes
7 AZCA
Azca has seen a revival and renewed interest, in part since Google locating an office and Google Startup Campus there in 2015.
8 BARRIO DE SALAMANCA
This area houses historic 19th century boulevards, fine dining restaurants and high end shopping. This area is particularly favoured by law firms and investment banks, being seen as a ‘trophy area’.
9 JULIÁN CAMARILLO
This area is home to particularly technology firms. The area offers value, with good transport connections via bus and several metro options a few minutes walk away.
10 CHAMBERÍ | ALMAGRO
One of the most active places in Madrid life, this area is dominated by restaurants, hotels, embassies and museums. Law firms, Investment Banks and firms looking for a notable address are located here.
11 MÉNDEZ ÁLVARO
This is an up and coming area behind Atocha station, with land available for development of larger lot size office buildings. With a metro station at the southern end and the pleasant Retiro park to the north of the station, this area offers future potential.