Demand for European office space growing at a brisk pace

In Q3 2015, European countries posted an overall volume of rental transactions in the total amount of over 3 mln sq. metres. Estimates compiled by analysts at JLL suggest that this figure represents an increase of almost 30% over the same period last year. What’s more, it’s a record-breaking result in recent years, on par with the figures for 2007, when the high watermark was achieved.

According to area experts, the turn of events points to the gradual recovery of the market on which office and corporate real estate in virtually all European countries is represented, although the outlook for the entire year is not quite as rosy as the results from eight years ago.  

The increased activity on the office-rental market is unfolding at different paces in different Old World countries. The briskest clip is being recorded in Lyon – lagging somewhat behind in the first couple of quarters – where the volume of rental transactions grew by almost 150%. The runner-up in terms of growth is Barcelona, posting an increase of 135%.

Activity on the rental market also grew in the French capital: the third quarter posted volume growth of 40% compared to the same period in 2014. Germany also boasted one of the most impressive results: four of the country’s five largest cities – Berlin, Hamburg, Dusseldorf and Munich – experienced growth of almost 800,000 sq. metres.  This is the best result since 2006; that said, the heightened interest in real estate is being driven primarily by the country’s high rate of employment. The number of deals dipped slightly in London in the last quarter, although demand continues to be strong thanks to the activity of large corporations.

According to analysts, the stable increase in demand is expected to continue into next year – JLL forecasts growth of at least 5%.