European Office Vacancy Levels At Four Year Low
London, 15 December 2015 Prime office space across Europe is in short supply with vacancy levels the lowest since 2012, according to global real estate advisor CBRE.
Across 47 European cities, the majority - 69% - are now showing stable or declining office vacancy rates. As a result aggregate vacancy across the region is now at its lowest level for four years. This trend is most pronounced in Warsaw which recorded one of the largest reductions in vacancy rates, falling by over 1pp to 12.9%, in the third quarter. This marks the lowest vacancy rate since the first quarter of 2014 in the Polish capital.
In contrast, only 15 office markets - 31% - saw any upward movement in vacancy levels. Helsinki recorded the highest growth with levels rising by 1.5pp to 14.5% in the third quarter, marking its third consecutive quarter of growth in vacancy rate.
Richard Holberton, EMEA Head of Occupier Research, at CBRE explains:
“We are now seeing strong declines in office vacancy levels across EMEA. Paris, Frankfurt, Brussels and London’s West End office market all saw vacancy rates decline in the last quarter with even stronger falls seen in Madrid, Budapest and Dublin. The best office buildings and locations are getting secured quickly, heightened by the office development pipeline seeing a slowdown in growth. Year-to-date office completions for core EMEA markets are 7.2% lower than in the same period last year.
“These two factors are supporting the acceleration of prime office rents. For instance Dublin’s rents are now almost double their cyclical low of 2012. Rents in other markets, including Stockholm and Barcelona, are rising at a rate of 10% per year or more.”