Hi!
I have been reading a CBRE market report on the logistics market in Spain. It shows how the vacancy rates within a specific market (Madrid) has decreased drastically over the past decade but has increased recently due to the current situation. I am a little bit unclear about how they are calculating this vacancy rate when it is an entire market. Is this still the vacant days / rentable days * of the whole market or is the vacant properties / entire supply within that market. This might be a stupid question but I new to all this.
Any help would be greatly appreciated!
Not sure I understand what you are asking, but CBRE calculated vacancy as follows: Total Vacant Space / Total Inventory
keep in mind, the availability rate will be a lot more key in my opinion as it can capture future product coming online + sublease space.
vacancy is a pretty static number year over year as lease terms are usually 5-10 years long. availability rate will be more key here for overall market health.
Thank you for your reply!
So if a specific market has a vacancy rate of 1% and there are 100 properties in the market, it theoretically means that one property is vacant? is that how they calculate it?
The vacancy rate in a real estate market is typically calculated as the total amount of vacant space divided by the total amount of rentable space in that market. So, in the case of the logistics market in Madrid, the vacancy rate would be calculated as the total amount of vacant logistics space divided by the total amount of rentable logistics space in Madrid.
The rentable space refers to the total area of all logistics properties that are available for lease or rent, regardless of whether they are currently occupied or vacant. This would include both existing properties and any new properties that are being developed or planned for development in the market.
It's important to note that vacancy rates can be calculated using different methods depending on the specifics of the market being analyzed. However, the method described above is one of the most commonly used in the real estate industry for calculating vacancy rates.
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