Warsaw, Prague 'most attractive' office locations in Europe

The office markets in Warsaw, Prague and Hamburg are now the three most attractive locations in Europe, according to the Feri Real Estate Market Rating for the first quarter of 2009.

Feri said the three cities are expected to see a high demand for office floor space in the coming years. 'We believe that economic growth at these locations will exceed the European average,' said Wolfgang Kubatzki, head of Real Estate at Feri EuroRating Services. 'This implies a corresponding increase in the number of white-collar jobs.' He said the rent performance in these three cities is far less volatile than it is in the British capital.

London - despite being the focus for many opportunistic investors due to the sharp price correction in the UK - dropped out of the top ten of European office markets in Feri's ranking.

The latest Real Estate Market Rating compiled by Feri EuroRating Services analyses 42 European and 67 German real estate locations. 'In London, we saw a vastly exaggerated rental growth in 2006 and 2007,' said Kubatzki. He said that the deterioration of rent rates - which started last year in the wake of the financial crisis and hit an annual rate of almost 10% - would further intensify this year.

'London will not bottom out until 2010,' Kubatzki suggested. He said he expected rent rates to show a slight increase by 2011.