Madrid is currently one of the areas of Spain with the greatest housing needs.
It is estimated that the capital and its surrounding area will need some 175,000 flats over the next decade to meet demand, which is high.
To fix the issue and expand the region's residential stock, the local government has presented a plan to convert underused office buildings into housing.
The measure aims to bring up to 20,000 flats onto the market in two years by making the process of changing the use of land and obsolete buildings much easier - provided that the homes are available for rent at affordable prices.
In this, Madrid is following in the footsteps of other cities, including New York, which are trying to repurpose office buildings that have become underused as a result of changes to the employment landscape and the rise of remote working following the COVID-19 pandemic.
Spanish workers spend on average just under 3 days a week in the office, compared to 1.8 days at the European level, according to real estate consultancy CBRE. Globally, the average is also 1.8 days a week in the office, which shows that most corporations are opting for a hybrid working model.
"Companies are looking for more collaborative spaces to attract employees to offices, and the most obsolete buildings that are not adapting to these trends will be subject to a transformation," Maria Mayoral, head of transformation and change of use at consultancy CBRE, told Euronews.
In Madrid, many workspaces that do not meet the necessary characteristics for the new working needs of companies could soon be given a new lease of life.
"This 172 square metre office is one of many that have been left empty," Alejandro Villanua, from the investment department of Gilmar real estate, told Euronews during a visit to the property.
"The office is bright, has ventilation... The project that would have to be done would be minimal to adapt it to housing and even the space is enough to take out several units".
A global trend
In the last decade, CBRE has identified more than 150 changes of use carried out, with a considerable upturn from 2019 onwards.
Almost 90% of these are located in Madrid and Barcelona and 80% of the final uses have been Living (54%), where the conversion to residential for sale and purchase stands out, and Hotels (25%). In terms of surface area, in the last ten years, almost 220,000 square metres have changed from offices to living spaces and 164,000 square metres from offices to hotels.
"The conversion of buildings is consolidating as a real solution to solve some current problems such as the lack of land, shortage of residential supply or the need for a more sustainable and efficient building stock", explained CBRE's Mayoral.
In 2024, more than 55,300 housing units are expected to be created in the United States from office buildings, an increase of more than four times since 2021, according to a study published by RentCafe.
In London, it is estimated that dedicated office buildings that could be converted into flats could reach 28,000 units.
"Our data shows that between the beginning of 2022 and the end of May 2023, around 1.5 billion in office assets in central London had been acquired with the intention of converting them to another use," CBRE highlighted in a report.
In Madrid, Mayoral's team calculates that there are currently 308 office buildings susceptible to change of use, totalling almost 1.5 million square metres spread throughout the region.
"Specifically, within the central ring, 185 buildings of this type have been identified that are not multi-ownership - one of the factors that can make conversion difficult - and which total almost 800,000 m2 of floor space above ground level".
According to data from the consultancy firm, in Madrid alone, €200 million have been invested in the purchase of assets that are to be converted for change of use. But Mayoral stresses that the final size will depend on the urban planning and architectural regulations and the involvement of the authorities.
