You are here:

Demand outstrips supply for offices across Europe

Warsaw

Demand for office space in the European market has been hampered by a lack of good quality supply in the first quarter of 2016, according to the Savills European Offices Market report, with most cities unlikely to feel the impact of a projected 22% rebound in development activity.

Total take-up for office space in Europe reached 1.75m sq m in the first quarter of 2016 which is almost the same figure registered for the same period last year. Limited office development combined with a strong level of take-up has dried up supply across most cities with only three exceptions: Poland (up 180 bps qoq), Copenhagen (20 bps) and London West End (10 bps). Office take-up in the first quarter was increasingly being driven by business expansion, which explains the growing demand for small and medium-sized office floor space in various cities.

Since development completions dropped by 16% in 2015 and letting activity over the past 12 months has remained dynamic, the level of supply has continued to decrease rapidly. Based on the overall office pipeline there is an anticipated rebound of development activity of 22% by the end of the year, creating approximately 2.7million sq m of office space. This  represents about 42% of the average five-year take-up across Europe, but it is unlikely to make an impact on the majority of markets. With the exception of Warsaw and Brussels, many projects are already pre-let, up to 63% in Berlin, and it is expected that vacancy rates will either decline or remain stable rather than see growth. The average vacancy rate across European cities is at its lowest in seven years, dropping from 8.4% in Q4 2015 to 8.1% in Q1 2016.

Wioleta Wojtczak, head of Research and Development team in Poland, comments:

“While in majority of Western European capitals development activity is rather limited the office market in Warsaw will experience a record high volume of new supply during 2016 with ca. 480,000 sq m. Despite the high volume of take-up recorded in 2015 and the first quarter of the year demand for office space is not expected to surpass the level of new supply causing an increase in vacancy rate across the city and putting some downward pressure on rents, especially in older buildings.”

Średnia ocena

Related content

Komentarze

Log in to post comment.

Stock exchange & Currency

Kursy walut
Money.pl - Serwis Finansowy nr 1
NBP 2018-11-21
USD 3,7829 -0,19%
EUR 4,3070 -0,56%
CHF 3,8029 -0,37%
GBP 4,8353 -0,60%
Wspierane przez Money.pl
Giełda
Money.pl - Kliknij po więcej
GPW (2018-11-21 15:19)
WIG 56151.87 +1,71%
WIG20 2206.05 +2,11%
mWIG40 3824.59 +1,39%
sWIG80 10663.71 -0,23%
Wspierane przez Money.pl
In our website we use cookies. Learn more here. ×