European office markets perceived as stronger offer higher rental concessions to tenants than markets perceived as weaker, a survey conducted by Savills has revealed.
European office markets perceived as stronger offer higher rental concessions to tenants than markets perceived as weaker, a survey conducted by Savills has revealed.
In its latest European research report, Savills highlights that contrary to expectation London City, Paris CBD and Paris La Defense currently offer some of the highest available discounts - approximately 20% of the total months over a lease term.
The survey examines the impact that economic challenges in the period 2008 – 2013 have had on headline rents and rental incentives offered by landlords across 19 European markets.
Julia Maurer, European research analyst: 'Over the past five years landlords in some of Europe's prime office markets have lengthened rent-free periods to support headline rents. This means that markets such as London and Paris, where landlords should be feeling more confident, have surprisingly large incentives on offer.'
On average rent free concessions for prime CBD space have increased by 21% across Europe in 2013 compared with 2008 and currently account for an average 12% of the total rental period in the markets examined.
The highest percentage of rent free months offered in the markets surveyed is in Milan (25%), followed by the two Parisian markets, CBD and La Defense, (21% each) and London City and Dublin (each 20%). On the other hand Athens, where prime headline rents have fallen significantly over the past five years (-30%), only offers 2% of months rent free.
