European office market shows strength despite economic concerns

JLL’s Q3 2011 European Office Clock Report reveals prime rent and demand fluctuations

Article posted: 30 Oct 2011

According to the latest research by Jones Lang LaSalle, overall office leasing volumes in Europea continued to improve over the third quarter of 2011 despite variations in prime offices rents.

Prime rents increased over the last quarter in Stockholm, The Hague (both +2.4%), Hamburg (+2.2%) and Milan (+1.9%), although these were offset by decreases in Brussels (-3.2%) and Madrid (-1.9%), with rents for office space in Dublin down by -3.0% and rents for office space in Edinburgh showing a decrease of -1.8%.

Despite these changes, the Jones Lang LaSalle European Office Index is unchanged. Office rents in CEE markets remained stable compared to the previous quarter, reflecting continued positive demand.

Despite ongoing concerns, the amount of European office space let increased in Q3 2011, with 2.9m sq m of gross take-up, an increase of 6% compared to Q2 2011 and 16% higher than Q3 2010.

However, Bill Page, Head of UK and pan-EMEA Office Research, Jones Lang LaSalle said: “Demand is fluctuating across Europe. In the first three quarters of 2011, London office space take-up fell by 40% whilst Berlin, Munich and Stockholm grew strongly. In CEE the Q3 figures are 29% higher than the same period last year.”

“New office space completions throughout Europe also remain low. Across the first three quarters of 2011, 2.3 million sq m completed, about 45% below the ten year average. Shortages of good quality space continue to be an issue in many markets.”

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Posted by Julie