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The Madrid office market reached 125,000 m² of contracted space during the first quarter of 2025, according to the latest report published by FORCADELL. While this figure represents a 13.79% decrease compared to the same period last year, it highlights that the sector remains resilient in the capital with solid activity.
By area, the CBD (Central Business District) led the way in leasing activity, accounting for nearly 35% of the total. This trend is driven by strong demand within the M-30 ring road, particularly in areas such as Azca, the Castellana axis, and the Cuatro Torres business district, which offer strategic locations that enhance corporate branding and support talent retention.
Given the limited availability within the M-30 and rising rental prices, the decentralized area also saw a significant volume of transactions and became the second-largest area in terms of leased space (31% of the total). The supply of Class A offices, offering numerous amenities and more competitive rents, has made this area an efficient solution for companies seeking to reduce costs without compromising on quality.
In contrast, leasing activity in the city center and peripheral areas was more moderate, accounting for 19% and 15% of the contracted space, respectively. Among the peripheral locations, Pozuelo de Alarcón stood out as the most in-demand area during the quarter, according to the published analysis.
Manel de Bes, Director of the Office Department at FORCADELL, positively assessed the data, noting that “the office market in the capital shows clear signs of recovery and maintains a healthy leasing pace, although the evolution differs across areas,” as the city center begins to experience very low vacancy levels, while supply outside the M-30 continues to grow.
In this context, as Manel de Bes points out, “we can expect significant relocations in the coming quarters as companies choose to move to more decentralized areas, which offer high-quality space capable of supporting large corporate operations and meeting current market needs.”
Furthermore, as the report highlights, landlords in these areas are making strong efforts to attract new tenants. Their strategies include direct financial incentives, extended rent-free periods, and delivering offices in plug & play format, which allows companies to minimize setup costs and speed up time-to-market.
As reflected in FORCADELL’s report, office availability in Madrid continues the trend of recent quarters and currently stands at 9.5%. Over the past year, this figure has dropped by almost 3 percentage points.
The CBD and Prime areas remain the districts with the lowest availability, with vacancy rates of 3.75% and 2.14%, respectively. Combined, they account for more than 60% of the reduction in availability in just one year, solidifying their position as the most in-demand markets in the city.
Meanwhile, the Central area has shown notable stability, holding steady at 10%, the same as the previous quarter. Additionally, most of the available supply is found outside the M-30, where decentralized and peripheral zones account for approximately 84% of Madrid’s total available office space.
Regarding rents, during the first quarter of 2025, the average office rent in Madrid remained stable, with a slight increase compared to Q4 2024, standing at around €23/m².
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