Office demand up 33% in Milan - Savills

Milan has seen an increase in the amount of office space required by 33% in the first quarter of 2009, when compared to previous years, according to international property advisor Savills.

The research, which reports on the Milan and Rome office markets, finds enquiries for office premises in Milan almost tripled in the final quarter of 2008, while the total volume of space requested almost doubled, and was focused on units between 500 m² and 1,500 m². At the end of Q109 there was an increase in the amount of space in demand by 33% (based on annual figures). In Rome, however, there were fewer requirements.

In both Milan and Rome office markets Savills suggests demand is attributed to the large portion of office occupiers that are reviewing their real estate options, in the light of a reduced headcount and/or the need to modernise and maximise space efficiency through consolidation.

However, the research cites there is a notable gap between enquires and actual space let suggesting the net absorption of office space is expected to be negative and that where there is demand, in particular Milan, the market needs to address rental values but also layout and specifications.