Strong start to the year for European office take-up despite economic and political headwinds
The European recovery has presented a rare source of upside over recent quarters. Low interest rates, reviving domestic demand and job creation continue to underpin occupier activity, though growth rates are expected to dip slightly this year and next. German growth is set to trend moderately slower after peaking in 2017, though France sees further gradual improvement. Brexit casts a shadow over UK performance, although the slowdown has been relatively mild to date. While we expect 2018 to pose a number of challenges, we forecast demand for offices to remain strong and rental growth to continue to outpace the long-term average.
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.
Please contact us directly to discuss any of the issues raised in this report or for more information about our research capability.
Head of Offices Research - EMEA Research
+31 (0) 650 671 152
Senior Analyst - EMEA Research
+44 (0) 207 852 4402