Vacancy contraction in Europe pushing up prime rental values

The average vacancy rate shrunk again in Europe in 2018 and probably attained its floor in several markets. The German markets still displayed the lowest vacancy rates, especially Berlin (1.7%, representing only 327,000 sqm) and Munich 2.3%). Luxembourg (3.7% of vacancy) was close to the level of German markets. Vacancy dropped the most in Amsterdam (-310 bps) and Warsaw (-340 bps). The share of empty premises fell in all the other markets, such as Central Paris (-100 bps), Central London (-120 bps), Milan (-110 bps) and Dublin (-170 bps). Prime rental values remained steady or increased in all the main European markets, except in Central London (-2% vs. the end of 2018) where prime rents reached £1,211/sq m/year. Madrid (+13%, €432/sq m/year) saw the most significant growth in rental values. Other big increases were in Hamburg, Berlin (+9%), Milan and Frankfurt (+7%).

EUROPEAN OFFICE MARKET - 2019 EDITION