An east to west shift in office rental growth in the second half of last year could continue in 2014, with strong performance expected for Western Europe, according to a new report from Colliers International.
An east to west shift in office rental growth in the second half of last year could continue in 2014, with strong performance expected for Western Europe, according to a new report from Colliers International.
Prime office rents surged in London’s West End (9%), the City of London (4.3%), Amsterdam’s CBD (7.7%) and the German cities of Frankfurt (2.7%), Hamburg (2.1%) and Berlin (1.9%) in the second half of 2013.
Craig Satchwell, head of the EMEA offices business team at Colliers, said: ‘In Western Europe, an improved economic outlook and localised shortages of good quality, centrally-located space resulted in increasing rents in the latter part of 2013. This will certainly continue in the next 12 months.’
Prime values fell in many eastern European cities in H2 2013, with Bucharest (5.6%), Warsaw (4%) and Geneva (3.4%) booking the biggest declines.
In Central and Eastern Europe, Moscow and Warsaw witnessed a reversal in fortunes, Satchwell said. ‘Prime rents in Warsaw fell in mid-2013 due to sustained high levels of construction activity, whilst in Moscow rents started to flatten due to falling economic growth rates and more cautious occupiers.’
The report also predicts an easing of the north/south risk divide in 2014, as confidence in southern economies improves, with stabilisation in rents and yields ‘likely’ in Milan, Madrid, Barcelona and Lisbon.
To read Colliers International's full report on H2 2013 European offices, click the attachment below.