Lack of available space restricts office take-up, but the European occupier market remains strong
The European economy has been impacted by the US-led trade upheavals. In 2018, there has been a deceleration in activity and a downgrade in expectations, albeit still modest. Looking ahead, both Germany and France are expected to see a step down in growth, although rates remain healthy by the standards of the last decade. Brexit continues to colour the UK outlook, but growth is set to continue. Hopes for a deal averting the worst-case options have risen of late, but it is a fine balance and it could be several years before the new relationship with the EU is finalised. Economic growth rates are projected to remain below par until a tentative revival in 2020.
Prime Rent represents the top open-market rent that could be expected for a notional unit of the highest quality and specification in the best location in a market, as at the survey date.
The Prime Rent reflects an occupational lease that is standard for the local market. It is a face rent that does not reflect the financial impact of tenant
incentives, and excludes service charges and local taxes. Stockholm is the only city where it is market practice to quote the rent as Prime Effective Rent, therefore the rent is including incentives (i.e.
rent free periods as well as relocation costs, tenant fittings, etc.). The Prime Rent represents Jones Lang LaSalle’s market view and is based on an analysis/review of actual transactions for prime office space, excluding any unrepresentative deals. Where an insufficient number of deals have been made for prime office space, an assessment of rental value is provided by reference to transactions generally in that market adjusted accordingly to equate to prime.
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