European office vacancy rates increased by an average of 30 basis points to 5.8 percent during second quarter 2020, according to Savills. However, vacancy rates remain at historic lows and well below the equilibrium of 9 percent, separating rental growth from decline, says the international real estate adviser.
Mike Barnes, associate, European research, at Savills, said, “Among the most undersupplied cities in Europe remain Berlin [1.2 percent], Paris CBD [2.0 percent] and Munich [2.3 percent]. Speculative development pipelines are still relatively limited and, therefore, we do not expect any large increases in vacancy rates in core markets.
“The undersupply of office space across Europe has continued to apply upward pressure to prime headline rents, which have grown by an average of 3 percent over the 12 months to Q2 2020, despite rent-free periods increasing by 1 percent.”
Matthew Fitzgerald, director, European cross-border tenant advisory, at Savills,
