Thank you for sharing!

Your article was successfully shared with the contacts you provided.

LONDON-Office rents are continuing to fall throughout Europe, the Middle East and Africa. In Europe, average rents fell 2.2% during the second quarter of 2002, meaning they are now typically 4.8% lower than this time last year. The Spanish capital Madrid and most German cities suffered the biggest falls, while the only rises were in Dutch and UK provincial cities.

And the short term outlook remains bleak, according to CBRE. Rents are expected to continue to fall until at least the end of 2003. Although demand should start to recover earlier than this, the build up in vacancy will take some time to bring the balance back in favour of rental growth.

The picture is no brighter outside the EU, with both Zurich and Geneva in Switzerland registering falls over the last six months, with a similar pattern in Central Europe, the Middle East and Southern Africa.

Michael Haddock, CB Richard Ellis’ Associate Director responsible for EMEA market analysis said: “It is a tenant’s market and will remain so for some time. We expect rents to continue falling for about the next eighteen months, but at a slower rate.”

However, many European markets experienced a slight recovery in leasing activity, and this was particularly true in Madrid, where take-up in the latest quarter was the highest since the end of 2000. And development activity is continuing to slow as existing schemes are completed and speculative schemes are put on ice. CBRE notes that the flow of development finance has been shut off much more quickly in this cycle than was the case in the previous cycle in the late 80s and early 90s.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.