August 24, 2001—Occupier demand for office space across Europe has weakened, according to a report by property consultants Jones Lang LaSalle.
According to JLLs property clock, the second quarter of this year saw slow rental growth in the main European markets. The overall office space take-up in Western Europe totalled 167,220 sq m (1.8m sq ft), which was 17% lower than the first quarter (195,096 sq m/2.1m sq ft).
Vacancy rates are expected to rise although JLL says they dont expect them to hit the levels seen in the early 1990s. The weakening demand as well as increased vacancy rates have resulted in a slow down in rental growth for prime offices.
Julia Felce in European research at JLL, said: “The second quarter clocks show a heavy grouping of markets in the rental growth slowing category, in both the retail and office sectors. On the whole, its clear that market conditions across Europe are not as favourable towards rental growth as they were in the first quarter, or at this point last year, but we have yet to see rents fall. In fact, the rents falling category on the clock is essentially empty (with the exception of Stockholm), reinforcing the fact that office and retail rental growth remains positive, even if at reduced levels.”
—Jessica Jarlvi
Reprinted with permission; copyright 2001 i-FM
