The average vacancy rate in the European office market was 9.37% in the first quarter of 2015 - the lowest level recorded since 2009, according to advisor Savills, which is predicting a further decline to less than 9% in the next months.

The average vacancy rate in the European office market was 9.37% in the first quarter of 2015 - the lowest level recorded since 2009, according to advisor Savills, which is predicting a further decline to less than 9% in the next months.

'With development completions still limited in almost all office locations many European cities appear to be undersupplied,' commented Eri Mitsostergiou, head of European research at Savills. 'This year is expected to see a 9% drop in development completions. However construction activity is slowly picking up, driven by improved financing conditions for speculative schemes and we expect completions to increase by 15% in 2016.'

The lowest vacancy rates are being recorded in London West End, Berlin and Stockholm at 3.8%, 4.3% and 5.75% respectively. The highest vacancy levels were recorded in Athens, Amsterdam and Warsaw at 18.5%, 16.1% and 13.4% respectively.

According to Savills, the scarcity of prime office space in some of the key European CBD locations caused rental growth to slow down slightly from 4% in Q4 2014 to 3.4% in Q1 2015. However, rental growth in prime non-CBD locations where available space is often plentiful has surged from 3.4% at the end of last year to 5.8% year-on-year in Q1 2015. Non-CBD locations that have benefited from rising demand exhibiting double digit prime rental growth include Vienna, Paris (La Defense) and Berlin at 24.4%, 17.8% and 12.2% respectively.

Office take-up in Q1 2015 across the survey area was on par with the same period last year, the firm finds, but down 20% compared to Q4 2014 which was a particularly strong quarter. The overall figures hide significant difference amongst cities.

London City recorded an increase in take-up of 56% compared to Q1 2014 with record-breaking take up levels expected for 2015. Vienna, Madrid, Warsaw and Munich also recorded high increases at 38%, 30%, 29% and 20% respectively, as several large office floor spaces or buildings have been taken-up. At the opposite end of the spectrum Brussels, Paris, Berlin, Dublin and Cologne recorded double-digit drops in letting volumes at -30%, -26%, -24%, -21% and -12% respectively, which is mostly due to the limited availability of high-specification and well-located office space.

Mitsostergiou added: 'Our expectations regarding demand in our survey area are positive. We predict stable or rising take-up in all our markets as the economic outlook for Europe improves. We believe we will see a rise of at least 5% in total leasing volumes by the end of the year.'