Demand for lower rents and the fact that many tenants are also renegotiating the terms of their leases caused prime office rents to fall across the European office market in the second quarter, according to a new report from Savills. However, prime CBD rents in Q2 only dropped by -4% compared to -6% in Q1 on a quarterly basis.
Demand for lower rents and the fact that many tenants are also renegotiating the terms of their leases caused prime office rents to fall across the European office market in the second quarter, according to a new report from Savills. However, prime CBD rents in Q2 only dropped by -4% compared to -6% in Q1 on a quarterly basis.
Currently prime CBD rents in the nine major office markets in Europe are 15% lower compared to Q2 2008. According to Savills, this downward trend is set to continue overall but might ease for the prime end of the market. The adviser is forecasting an average annual decline of -10%.
While office leasing activity was down in Q2 year-on-year, on a quarter-to-quarter basis take-up rose 23%, bringing total take-up for H1 to -47%, and improving the annual forecast to -35%. The figures are based on nine major European office markets.
Eri Mitsostergiou, Savills European research commented: 'We have seen that some tenants are using the current market conditions to seek cheaper accommodation, thereby increasing take-up in certain markets.'
