Is sublease space cheap in Madrid?

Sublease typically trades 15–30% below direct asks for equivalent specification. The total economics depend on remaining term, TI condition, and the assignment/sublet provisions in the prime lease.

Can I convert a sublease to a direct lease in Madrid?

Sometimes. On longer-horizon takes, ask the landlord to write a fresh direct lease at sublease commencement — they get a creditworthy long-term tenant; you get rent-free and TI.

Sublease availability in Madrid is concentrated in older Class B and lower-tier Class A stock; trophy assets like Castellana & AZCA clear quickly even when the broader market shows 8.6% vacancy.

Direct vacancy is 8.6%; sublease overhang is concentrated outside the trophy tier.
Sublease space typically prices 15–30% below direct asks for equivalent specification.
Term-take risk and limited TI are the two biggest sublease tradeoffs.
Trophy submarket (Castellana & AZCA) has the thinnest sublease overhang.

Madrid Class A sublease market

sublease">Sublease availability in Madrid is concentrated in older Class B and lower-tier Class A stock; trophy assets like Castellana & AZCA clear quickly even when the broader market shows 8.6% vacancy.

TL;DR

Direct vacancy is 8.6%; sublease overhang is concentrated outside the trophy tier.
Sublease space typically prices 15–30% below direct asks for equivalent specification.
Term-take risk and limited TI are the two biggest sublease tradeoffs.
Trophy submarket (Castellana & AZCA) has the thinnest sublease overhang.

Where the sublease overhang sits

In Madrid, sublease availability concentrates in the older Class A and Class B segments — not in trophy product. Vacancy across the broad Class A index is 8.6%; the trophy tier in Castellana & AZCA is structurally tighter.

What you give up

Subleases trade at a discount, but you inherit the prime tenant's term, get limited or no TI, and live with whatever fit-out">fit-out exists. For occupiers under a 24-month horizon, that tradeoff usually wins. For multi-year HQs, direct deals with rent-free and TI almost always produce better effective economics.

Negotiating points

Look for direct deals with the landlord at sublease commencement (a "bypass" structure) — landlords will sometimes write a fresh long-term lease to take a problem space off the prime tenant's books. Standard 5-year lease with 5-year extension option (5+5). Rent indexed to CPI annually. Service charges billed separately. Tenant typically pays IBI (real estate tax) and basura (waste tax). Bank guarantee of 3-6 months standard.

Key facts

city	Madrid
country	Spain
region	EMEA
classARentLocal	38 EUR/sqft/yr
classARentUsd	$42/sqft/yr
vacancy	8.6%
typicalLeaseYears	7
typicalRentFreeMonths	14
submarkets	5
primeYieldPct	4.6%

Frequently asked questions

Is sublease space cheap in Madrid?: Sublease typically trades 15–30% below direct asks for equivalent specification. The total economics depend on remaining term, TI condition, and the assignment/sublet provisions in the prime lease.
Can I convert a sublease to a direct lease in Madrid?: Sometimes. On longer-horizon takes, ask the landlord to write a fresh direct lease at sublease commencement — they get a creditworthy long-term tenant; you get rent-free and TI.

Editorial provenance

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

Primary sources for this page

CBRE Marketview reports — CBRE
JLL Office Insight — JLL
Cushman & Wakefield Marketbeat — Cushman & Wakefield
Savills World Research — Savills
Colliers Global Office Outlook — Colliers

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