Overseas interest in Madrid offices accounted for a 31% increase in transactions in 2010, up from 2% in 2009, according to a Savills report.

The international real estate adviser cited SEB, WP Carey and Continental Property among the key international players that have helped to revitalise the market and notes a preference for sale and leaseback transactions with long leases, particularly by SEB and WP Carey.

Savills said that the buyer profile for large portfolios always corresponds to institutional funds, the most recent of these were carried out by Moor Park Capital Partners with Banco Sabadell, RREEF with the second round of BBVA properties and Drago Capital with Caja Madrid, achieving yields of between 6.5% and 7%.

The report adds that small lots adapt well to the investment volumes and yields looked for by private investors, of between 4.5% and 6%. Overall the report records a 14% increase in investments transacted compared to 2009, totalling EUR 700 mln.

Luis Espadas, head of capital markets at Savills Madrid, said: 'The rising interest shown by foreign investors in Madrid is encouraging, although national investors continue to be active and dominate the market, both as buyers and sellers.'