Lisbon, Cologne and Prague among stronger performers as Europe office market battles headwinds

According to Savills' latest research, for the year to date, European office take-up is 9% above the five-year Q1-Q3 average following a strong first half of activity and a resilient Q3.

European office take-up reached 2.1 mln ft2 during the last quarter, in line with the five-year Q3 average, says the international real estate advisor.

Among the strongest performing markets have been Lisbon (+111% against five year YTD average), Cologne (+41%) and Prague (+30%).

Slight warning signs?
Mike Barnes, associate director, commercial research, said: ‘Average European office vacancy rates have increased marginally from 7.3% to 7.5% during the third quarter of 2022 yet core markets’ vacancy rates generally remain below 5%, including Paris CBD, Berlin and Cologne.’

‘Average prime European office rents rose by 5.5% following a shortage of best in class stock available across the core markets and we expect further rental growth into 2023 as occupiers compete for the best space.’

Christina Sigliano, EMEA head of occupier services, said: ‘Given the continuing demand for prime CBD office space, we expect a fairly busy final quarter of deals and anticipate total take up for 2022 to reach around 9 mln m2 with a steady flow of deals into 2023.’

Developers cautious
'Developer sentiment remains cautious as we approach next year resulting in delayed construction starts. As a result, those occupiers seeking high quality space in 2025/26 will ultimately need to start their search earlier.’


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