Thank you for sharing!

Your article was successfully shared with the contacts you provided.

Allan Saunderson is managing editor of Property Finance Europe and a contributor to GlobeSt.com.

LONDON-Rents and development activity in many locations in Europe will continue to decline over the next six months, while vacancies will rise as the economy recovers only gradually despite the improvement in European economic sentiment, says international realtor Savills.

Prime CBD rents dropped 10.5% across Europe in third quarter, leading Savills to predict average annual CBD office rental growth for 2009 falling by around 11.0%. At the same time, average rents for 70% of 33 cities surveyed by Savills will fall over the next 6 months, while only 25% will remain stable. In development, demand will drop over the next six months, boosting supply by 65%. Average rates currently stand at 10%, 35% higher than in the first half of ’08, and these are set to rise further in most locations.

Savills European research analyst Eri Mitsostergiou says, “Economic sentiment is improving, but the recovery is expected to be slow. Take-up levels, although improved in some locations in the second quarter of 2009, are still considerably lower compared to last year and prime CBD rents are also lower in comparison to 2008. We do not expect these trends to change significantly over the next six months.”

European headline prime office rents will remain steady in the fourth quarter in 14 of 33 locations. Amsterdam, Athens, Dublin, Bucharest, Edinburgh, Luxembourg, Manchester, Marseille, Oslo, Milan, Prague, Rome, Vienna and Zurich are expected to hold steady. More than half the cities surveyed showed improved leasing activity in second quarter, but the recovery will be slow as growth remains largely negative and some countries forecast rising unemployment. In response to a repricing of rents and an overall drop in take-up of 44% over the first half, occupiers have renegotiated many existing leases, rather than relocating to new premises. This has led to a rise in incentives, particularly in London, Amsterdam, Paris and Brussels.

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?


Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information


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.