Europe should see a gradual corporate return to its office markets over the course of 2014, predicts CBRE in new research, as the shackles come off the region’s largest companies. “It is no secret that in recent years corporate occupiers have been constrained by stringent cost management strategies born out of the economic downturn. Now, things are changing in line with an improving economic environment, which we expect to have material impact on the office market this year,” says Richard Holberton, Senior Director, EMEA Research.
Of particular interest are Madrid and Paris where low rents have spurred a surprising number of small and mis-size deals. Growing demand will meet with tight supply of high quality office space, however, which is likely to lead to prime rental growth. CBRE reports that this is already underway in London’s West End, where 5 percent prime rent growth was recorded in Q1 of 2014. Even Nordic cities such as Oslo and Stockholm are seeing pressure on rents, with Q1 rises of 5.2 and 2.3 percent respectively.
“It is evident that there has been a shift in the priorities for corporate real estate occupiers over the last year,” says Mike Gedye, Executive Director, EMEA Global Corporate Services at CBRE. “Concern about the impact of weak economies has diminished significantly with future growth opportunities now a core part of portfolio planning again.”
