• Madrid Investment Attraction

Susana Rodríguez (Savills): “The number of households in Madrid is growing, and the supply of homes is insufficient. Investors want to fill that gap”

Susana Rodríguez is a member of the Board of Directors of Savills in Spain and head of the commercial area of the company, in addition to being part of the board of the British Chamber of Commerce in Spain. Founded in 1855 in the United Kingdom, Savills has been present in our country for thirty years. Today it is one of the leading real estate companies in the world: they manage over five million square meters of real estate space worldwide in assets in different sectors and have a large portfolio of national and international clients. This allows the board to gauge a global vision of Madrid as a real estate market and its status with respect to other large European capitals.

Ms. Rodriguez talks with Madrid Investment Attraction about these and other issues in this interview. “Madrid is much better positioned than a few years ago,” she says. “It has made a name for itself in the international market.”

M.I.A.: When did Savills open in Spain and how has it fared since then? How many employees work there now?

S.R.: We started over 30 years ago. The company is British and is headquartered in London. The first Spanish office was opened in Madrid and in 2017 it grew a lot following the purchase of Aguirre Newman, with 100% Spanish capital. For a while we shared a name and since March of this year the brand is only Savills. We have more than 39,000 employees worldwide. In Spain we have 630 workers, of which 450 are in Madrid, the most important and representative office. In addition, we are, in order of importance and turnover, also present in Barcelona, Malaga and Seville and Valencia. 

M.I.A.: What has the pandemic meant for your company and your customers?

S.R.: We were forced to adapt to new ways of working in a matter of 24 hours. They were very intense weeks. We have national clients, but a very high percentage are international and had different experiences depending on where they lived.

Then we got to work on what the clients’ return to the office was going to be like. We manage several million square metres of land, industrial buildings, shopping centers and workplaces and we had to think about how to put them into operation: whether we could increase the provision of parking spaces so that people would not have to use public transport, interpersonal distances, air filtering and ventilation, well-being and attention to sanitary measures… We had a lot of work.

M.I.A.: How is the work-from-home boom impacting your business?

S.R.: In 2020, the office market came to a standstill. Companies did not take decisions about renting new square meters. But in 2021 and in 2022 it has been reactivated. We talk a lot about teleworking, but what we see is a broader phenomenon: the keys are flexibility, sustainability and well-being. Working schedules are more flexible. Concern for the physical and mental health of workers is one of the legacies of the pandemic.

What do we see on the owners’ side? They have invested in improving air quality and the sustainability of buildings. Many companies are rethinking their working model. Now there are people who are in the office and people who are not: it is no longer a place with tables and chairs where everyone arrives and does not move. You need private areas because there are many more people connected and maybe not as many workstations as meeting places are needed to do collaborative work. It is not so much that offices become smaller, but that spaces have to be adapted and everything needs to be more flexible.

M.I.A.: And the rise of e-commerce? What new challenges are you facing in general?

S.R.: E-commerce has progressed a lot lately: what we thought was going to happen in the next eight or ten years has happened in just two. It has really taken off. Rentals and the development of new logistics spaces have increased a lot, because demand has been so strong that investors have looked for new locations and spaces. E-commerce has emerged stronger from the pandemic for obvious reasons. Madrid has worked phenomenally. But we see a trend: where before Madrid and Barcelona were the main logistics markets, now new ‘hubs’ have appeared throughout the peninsula, because to be able to deliver in two hours and provide good service it is necessary to be present in other areas of Spain.

M.I.A.: What are the differences between the Madrid real estate market and that of other large European capitals, apart from the price?

S.R.: Madrid is a very dynamic market where new homes are constantly being built. It is a magnet for other areas of Spain. And it’s starting to have international traction. Historically, Barcelona was the pole of attraction of international clients, but for a few years international demand has been increasing in Madrid. Madrid has made a name for itself and is cheap compared to other European capitals.

The quality of life, its size, cultural offer, public transport network, and the Barajas airport are points in its favor. Moreover, it has emerged stronger thanks to its management of the pandemic. We were one of the first European cities to open with certain restrictions and time limitations. That made people come from other European capitals and get to know Madrid. There is now more international demand, both for hotels and in the residential market.

M.I.A.: How do you think Madrid is positioned when it comes to attracting foreign talent and companies? What elements differentiate it, both globally and in the real estate market?

S.R.: Much better than a few years ago. The figures support this. Recently I was in Munich, at Expo Real, one of the main real estate fairs in Europe. The interest of international investors is very evident. The Community and the City Council of Madrid had a stand and told us that they were very happy with the experience, because they had not had a presence in this type of fairs for many years. They were very encouraged by the interest aroused by Madrid, which I can confirm from my meetings with investors.

M.I.A.: Which sectors are more attractive to investors: residential, offices, logistics, hotels…?

S.R.: Hotels and the residential sector, in a broad sense. There is a lot of interest in investing in residential property rentals and other types of property: student residences, nursing homes… It is a niche sector. Madrid is growing in number of students, universities, and business schools, so there is interest in increasing the number of beds. The residential property for rent market is attracting a lot of interest in general because of what we mentioned before: the increasing population. The number of households is growing, and the supply of homes is insufficient. Investors want to fill that gap.

M.I.A.: What is your opinion of the new developments such as Madrid Nuevo Norte, the reconversion of AZCA or the new urban developments in the southeast?

S.R.: So that there can be more residential property for rent, the scarcest and most precious asset is land. There are several development areas, but developed land ready for construction, where you can go with a project and ask for a license, there is little. There is a lot of interest from investors in these developments because they understand that it is the key raw material needed to develop projects. The people in charge of Madrid Nuevo Norte took a model to Expo Real that attracted a lot of attention. These are much-needed developments because there is a shortage of ready-to-build land opportunities. Valdebebas already has very little land left: there are plots of offices, but not many to build new homes. In Valdecarros, Cañaveral, the east… there is growing interest.

M.I.A.: How do you see the prospects for British investment in Spain at such a turbulent time for the United Kingdom, with a new government and the pound falling?

S.R.: The British Chamber of Commerce has an investment committee in which Savills participates. We will publish the barometer of British investment in Spain in November. There we will see the evolution. Although there will be a lag, the figures we will present will be positive. The United Kingdom is the European country with the highest volume of investment in Spain and the second globally only behind the United States.

M.I.A.: What initiatives can the British Chamber carry out in collaboration with local authorities to promote and make Madrid visible as an investment destination?

S.R.: An initiative launched by the Chamber is to organize a business trip to London and Cambridge. London because it is the financial center and Cambridge because it is a leader in education and startups. It will take place in the first quarter of next year. It’s important to go where the capital is and to talk with people in other countries. In addition, the Chamber’s initiatives help to promote Madrid in the United Kingdom. That’s what we are working on. How do we want to do it? There are several ways, but this trip is really important. There will be both public and private representation. Institutions must explain the benefits of Madrid in terms of infrastructure and private companies, how they boost the economy.

M.I.A.: Do Savills or the Chamber have a relationship with the local administration in Madrid, be it the City Council or the Community? How do you value that relationship and the support received?

S.R.: The relationship is very positive and fluid. Both the Community and the City Council are very active and work closely with the private sector. They listen. I think we learn from each other. The public-private collaboration that is so much talked about is a reality.