Gemma Bastida I Málaga, (EFE).- The economic strength of Málaga and the arrival of multinationals like Google have triggered the interest of companies in the city and the demand for offices, currently insufficient to satisfy a market hungry for new projects that 100,000 square meters of new surface area would be needed in the coming years, twice as much as planned.
Malaga has established itself as a pole of attraction for top-level technology companies, such as Citi, Santander, Vodafone, Accenture or NTT Data, and this is causing “a call effect” to other companies, mainly in the ‘tech’ field, but also from other sectors, interested in settling in the city.
Malaga’s problem is that in the last decade, hardly any new office projects have been developed, so the offer is somewhat obsolete and very limited, which complicates the establishment of new companies and slows down the deadlines. Despite everything, the interest in being in the city does not cease.
An insufficient office park
The capital of Malaga has slightly less than 600,000 square meters of offices, well below cities such as Seville (1.3 million meters), Zaragoza (1 million) or Valencia (728,000), and two thirds of this area are in the Málaga TechPark technology park, located about fifteen kilometers from the city.
Taking into account the “exponential” growth in demand for offices that Malaga has experienced in the last three years, the market would need to incorporate at least 100,000 square meters of new surface area in the medium-long term, according to EFE, according to those responsible for CBRE and Savills. Aguirre Newman, the two main real estate consultancies that operate in the city.
However, as of today, less than 50,000 square meters of new surface area are projected until 2025, a volume that will help to “relieve” the pressure of existing demand, although new developments will continue to be needed to guarantee the economic and business growth of the city. .
New projects underway
Among the new projects planned on Malaga soil is the building to be built by Merlin Properties, the largest listed real estate agency in the country, in what is now a car dealership on the Antonio Machado promenade.
Merlin plans to build a seven-story building on the seafront, in what will be its first project outside its three traditional strongholds: Barcelona, Lisbon and Madrid. The building, very close to the city center and the María Zambrano AVE station, will have 10,000 square meters of buildable space and is expected to be ready in 2025.
This past Friday, in addition, the real estate group Insur laid the first stone of the ‘Ágora’ building, which it will erect next to the Tabacalera Digital Pole, right on the Paseo Marítimo, and which will provide another 10,000 square meters of offices to the city.
Some other projects are underway, such as the one that Insur will also develop in the Martiricos area, covering 10,000 square meters, or the Plaza Building in the central Marqués de Larios street, which a local ‘family office’ will convert into another 7,000 meters of offices .
Low availability
According to Pelayo Fernández, market director of CBRE Andalucía Offices, the current vacancy rate in Malaga is slightly below 4.5%, although in other areas, such as the center, the figure drops to 2%, so there is “practically full occupancy”.
Savills shuffles very similar figures. According to Aranzazu García, Head of Offices of this consultancy in Andalusia, the ‘stock’ available to date stands at 5% on average, with differences also by area.
Thus, in the most central area, from Larios to Malagueta, availability is 3%, while in the business district it is 1%. On the outskirts of Malaga there is approximately 10% of space available, although “in many cases the offer does not meet the requirements of companies in terms of quality and surface size”.
Central and quality spaces
Pelayo Fernández assures that every month there are new companies that show their interest in establishing themselves in Malaga, although part of the demand is also fed by those companies already established here that need more space to grow.
Most of them are looking for spaces of more than 500 square meters that are centrally located and well connected, since a good location also allows them to attract talent. And they demand, above all, quality products with a seal of sustainability. “It is a requirement that they put on the table from minute one”, remarks the CBRE expert.
“They demand quality both in the work space and in the common areas of the building, but also in outdoor areas, natural light and efficiency in consumption. In short, sustainability and, increasingly, certifications that ensure the well-being of its employees”, emphasizes Aranzazu García.
Despite the shortage of offices, real estate companies use their imagination and alternatives to respond to the demand of companies, such as the so-called ‘flex’ format, already conditioned co-working spaces that adapt to the needs of companies.
At the moment, Fernández emphasizes, all the companies that are clear that they want to be in Malaga “have found a solution”.
Rising rents
This significant increase in demand, which has skyrocketed after the pandemic, has led to a notable increase in office rental income in Malaga.
According to Savills, these rose from 2021 to 2022 by 16%, although in some areas increases of up to 23% were reached. “As long as the imbalance between supply and demand continues, prices will continue to rise in the main areas and higher quality buildings,” says the manager of Savills.
Despite everything, Pelayo Fernández underlines, Malaga’s prices continue to be very competitive compared to other markets, with an average income that is still below that of the main European cities.
The capital of the Costa del Sol, therefore, has become a very attractive market for companies and investors, and the forecast is that this trend will continue in the coming years. EFE