* Colonial says its rents to rise moderately in '09
* Market to get worse before pick-up begins -Clemente
By Ben Harding and Andres Gonzalez
MADRID, March 25 (Reuters) - Rental prices for office space in Spain will fall more than 20 percent from their 2007 peak by end-2009, accounting firm Cushman & Wakefield said on Wednesday.
Jaime Oliveira, C&W's Madrid office head, said rents would tumble despite there being few vacancies in the Madrid and Barcelona office markets. "It's not showing up at the moment but rents will fall, I think more than 20 percent from the peak, by the end of 2009," he told Reuters on the sidelines of a PricewaterhouseCoopers property conference.
"If you are renewing your rental agreement from five years ago, your rent could be around where it was then," he said.
Oliveira said deals were still being made in the Spanish commercial market, mostly family investors and a few German property funds, although the lack of credit was limiting the size of transactions.
"Private investors and German funds are there but only for 20 million euros ($27 million) to 50 million euros ($67.49 million), not for 300 million. Big deals mean financing so we have to focus on these small deals," he said.
COLONIAL RENTS STEADY
Earlier, the head of one of Spain's biggest property firm Colonial, which lost 4 billion euros in 2008 on the crumbling value of its assets plus writedowns, would not cut rents from when they were first set.
Rental contracts are normally five years long and Chief Executive Pere Vinolas said those Colonial was renegotiating in 2009 were set before rents shot up.
"Our rents are rising moderately," he said.
Other speakers at the conference remained bearish on the outlook in Spain as its decade-long property boom fades into memory.
Ismael Clemente, managing director of Deutsche Bank's RREEF Alternative Investments said foreign investors were staying well clear of Spain, while the idea that a large pool of capital was waiting in the wings was "a myth".
"We can expect some very tough years ahead. Things will become worse before they start to improve," he told delegates.
"Who can withstand this? To survive you have to be well capitalised and which of these (property) companies can say that. Not many". (Writing by Ben Harding; Editing by Andrew Macdonald) ($1=.7408 Euro)