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Spring 2007
European Office Markets
- Strong performance of the European economy and higher business confidence resulted an increase of total take-up in all markets in 2006 compared to the year before, by 16% on average.
- Vacancy rates have dropped slightly further in the study area and they currently average at around 9.0%. The issue of second-hand accomodation remains and may offer some redevelopment opportunities as demand strengthens.
- Prime CBD rental growth across the study area is gaining pace reaching the late pre-downswing level noted in the second half of 2001. Almost all markets have entered an upswing phase and the average annual prime rental growth for Q1 2007 is at 9.2% compared to 6.7% in our previous survey in Q3 2006
- The outlook for rents is positive, as demand and supply are becoming more balanced. However, this is a medium term view as new developments will commence within 2007 and will be delivered onto the markets 18 to 24 months later.
- Prime yields have compressed further, down to an average of 5.1% compared to 5.3% in our previous survey. We believe that yields may have bottomed out in some markets and return expectations should stem from active asset management rather than capital appreciation.
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CONTATTI
Lydia Brissy + 44 (0) 20 7016 3776
lbrissy@savills.com
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