For institutional fund strategies, Castellana & AZCA carries the strongest investor flag in Madrid, with prime yields around 4.6%.

  • Trophy submarket (Castellana & AZCA) carries the strongest investor flag.
  • Prime yield: 4.6%.
  • Core funds buy income; value-add buys repositioning of secondary stock.
  • Cap-rate spread between trophy and secondary has widened post-2022.

Madrid office fund strategy and flag

For institutional fund strategies, Castellana & AZCA carries the strongest investor flag in Madrid, with prime yields around 4.6%.

TL;DR

  • Trophy submarket (Castellana & AZCA) carries the strongest investor flag.
  • Prime yield: 4.6%.
  • Core funds buy income; value-add buys repositioning of secondary stock.
  • Cap-rate spread between trophy and secondary has widened post-2022.

Where core funds buy

Core capital concentrates in trophy stock with long-WAULT income. In Madrid, that's Castellana & AZCA and assets like Torre Caleido (Cuatro Torres), Torre Picasso.

Where value-add looks

Value-add capital looks at secondary Class A and convertible Class B with repositioning angle. The trophy/secondary cap-rate spread has widened post-2022, which has reopened the value-add basis for repositioning plays.

Key facts

cityMadrid
countrySpain
regionEMEA
classARentLocal38 EUR/sqft/yr
classARentUsd$42/sqft/yr
vacancy8.6%
typicalLeaseYears7
typicalRentFreeMonths14
submarkets5
primeYieldPct4.6%
primeYield4.6%
trophyAnchorCastellana & AZCA

Frequently asked questions

Where do core funds buy in Madrid?
Trophy submarket — Castellana & AZCA — and the most defensible long-WAULT assets within it.

Editorial provenance

Reviewed by Samuel Okafor — EMEA contributing editor. Last updated 2026-04-15. See our methodology and editorial standards.

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