Office occupancy levels climb across key European cities to 57% - some weekdays almost back to pre-pandemic norm of 70%

Madrid, at 65%, has the highest average occupancy rate of the cities the international real estate advisor studied, overtaking Paris, which at 62% is now recording the same occupancy rate as London’s West End. The latter has seen the biggest jump in occupancy levels of the cities examined: in the last six months rates have risen from 50% to 62%. This is partly due to activity amongst finance companies, says Savills: when examined alone, occupiers in Central London’s financial sector (excluding insurance) are recording a 63% average occupancy rate, due to the sector largely favouring a four-days-a-week in the office model. As many organisations in the private equity and investment management space favour West End locations, this has contributed to the district’s rapid increase in occupancy. Warsaw has also seen occupancy notably increase from 46% to 55% since February, reflecting more demand for CBD locations.

The international real estate advisor says that given the average occupancy levels on Tuesdays and Wednesdays are now approaching close to ‘normal’ levels of around 70%, this is a signal to occupiers to be cautious when planning their office strategies as they need to have enough space is to accommodate peak worker occupancy, even if on other days levels are lower.

Rebecca Webb, Director of EMEA Cross-Border Tenant Advisory at Savills, comments: “Our latest data indicates that average occupancy rates have increased across all weekdays in key European cities, but it’s important to look at the peak days given it’s the occupancy levels on these that determines the minimum amount of office space an occupier needs. What is key is how the space is designed to meet the diverse needs of employees, ensuring that they have alternate work settings within the office to suit various tasks throughout the day. This therefore places greater importance on the shared spaces of the office which employees are expecting much more from for greater productivity. Demand continues to intensify for well-connected, good-quality office space in mixed-use locations, and amid construction delays and a shortage of prime stock, occupiers will have to compete for the best space, supporting prime rental growth.”

Mike Barnes, Associate Director in Savills European commercial research team, adds: ”Looking forward, we expect average European office occupancy rates will begin to stabilise around the 60% mark, as companies and employees find an equilibrium that works for them, although this will vary between cities and sectors. The European cities that are showing a pattern of high occupancy – namely Madrid and Paris - are supported by a high proportion of city centre living, good transport infrastructure and lower public transport costs.”

-ends-

Read Savills Spotlight on European Occupancy Rates report in full here

Notes to Editor:

Methodology:  

Savills Research has analysed office occupancy rates based on the average number of office workers over the course of a working week for a sample of fully let, multi-let office buildings located in the central business district (CBD) of selected European cities. The data is based from building management systems from Savills European Property Management network taken, during September 2023, and attendance is based on one user’s access card per day. Average occupancy rates were estimated to be at 70% before the pandemic. Central London’s business sector analysis refers to an average of London West End and London City.