European office market fundamentals solid as take-up surprises on the upside
In Q3 2016, European office take-up fell by 7% y-o-y, dragged down by lower activity in the UK and Spain. However, office market fundamentals remain strong in mainland Europe, with Q3 2016 take-up 9% ahead of the 10-year average. While leasing in London has clearly slowed, the impact of the UK's referendum decision on the continental European leasing market has so far been modest.
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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