Savills: Resilient European office demand 9% above average despite weakening economies

European office take up reached 2.1m sq m during the last quarter, in line with the five year Q3 average, says the international real estate advisor. Among the strongest performing markets have been Lisbon (+111% against five year YTD average), Cologne (+41%) and Prague (+30%).

Mike Barnes, Associate Director, Commercial Research at Savills, comments: “Average European office vacancy rates have increased marginally from 7.3% to 7.5% during the third quarter of 2022 yet core markets’ vacancy rates generally remain below 5%, including Paris CBD, Berlin and Cologne.”

“Average prime European office rents rose by 5.5% following a shortage of best in class stock available across the core markets and we expect further rental growth into 2023 as occupiers compete for the best space.”

Christina Sigliano, EMEA Head of Occupier Services at Savills, says: “Given the continuing demand for prime CBD office space, we expect a fairly busy final quarter of deals and anticipate total take up for 2022 to reach circa 9m sq m, with a steady flow of deals into 2023.”

“Developer sentiment remains cautious as we approach next year resulting in delayed construction starts. As a result, those occupiers seeking high quality space in 2025/26 will ultimately need to start their search earlier.”

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To read the report, please visit:

https://www.savills.com/research_articles/255800/336147-0