Europe’s office sector is recovering at different speeds, with occupier activity remaining impacted by the uncertain economic outlook as well as weak labour markets, according to Jones Lang LaSalle.
Europe’s office sector is recovering at different speeds, with occupier activity remaining impacted by the uncertain economic outlook as well as weak labour markets, according to Jones Lang LaSalle.
In its latest European Property Clock for Q2 2013, the adviser reports that while prime office rents continue to recover overall in Europe, the European Prime Office Rental Index remained in negative territory (-0.7%) compared with a year ago. JLL expects moderate rental growth for the remainder of the year.
Prime office rents in Dublin continued to recover from their historic lows in Q2, increasing by 9.4% year-on-year.
Rental declines were recorded in Lyon (-5.3%), Budapest (-2.5%), Warsaw (-2.0%), and in Barcelona (-1.4%).
Prime office rents in both London’s West End and the City remained unchanged at £1,049 / € 1,225 and £614 / €716 per m2 per annum respectively. However, the growth outlook remains strong.
Prime rents in Europe’s biggest market Paris also remained stable, but current economic headwinds are likely to take their toll on the short-term outlook, JLL said.
On the supply side, office completions fell further over the quarter (-11%) to reach a 10-year low of 720,000 m2, bringing the first-half figure to 1.5 million m2.
On the demand side, Q2 office take-up in Europe improved slightly over the quarter (+5%), but was down on Q2 2012 (-3%) and below the five-year average (-5%).
Activity in Germany remained healthy with all index markets, apart from Hamburg, showing increases over the quarter.
