Office Rents Set to Rise in Leading European Cities
The cost of office space in key cities throughout Europe is expected to rise according to commercial property advisor Savills, with the central business districts of London, Frankfurt and Milan highlighted as leading the way with these predicted rises.
Driving these price rises appears to be the lack of development which has taken place during the last two years. With little or no new office developments coming to market during this period, the competition for existing office stock has increased and prospective tenants have seen cost rise accordingly.
Lydia Brissy, Savills European Research Director, said: ΓÇ£Rare and expensive new CBD office spaces might deter some office occupiers who may consider relocating into secondary areas, but CBD locations will remain the jewel in the crown for major tenants.
ΓÇ£As pipeline is very short prime rents are expected to keep on rising, for example in Stockholm where a shortage of prime modern office premises resulted in a strong rental growth in Q1 and Q2 of this year.ΓÇ¥
Another impact of the rising cost of commercial offices is a change in the way that large firms are approaching their property requirements. According to Eri Mitsostergiou, Director of European Research, many large occupiers are expected to look at cost saving initiatives, such as moving to smaller offices, in the coming year.
The process of larger businesses streamlining their office space has already been noted by officebroker.com, with a growing number of corporate firms looking at serviced office space as a way of adapting their working practises and increasing efficiency.
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