Savills’ analysis revealed that increases in office spaces higher than 150.000 sqm in Lisbon and 100.000 sqm in Porto are expected until 2022. But, following the current occupancy trends, it is expected that many of these spaces will be quickly absorbed.
The numbers are from Savills’ latest European Office Development report which revealed a strong competition for quality working spaces in Europe. Until the end of the year, more than 5.2 million sqm in new office spaces are expected to be available Europe and a similar increase (5.1. million sqm) is expected for 2022. However, Savills estimates 54% of these new offices projected for 2021 to have already been pre-leased, so that any new prime office space will be immediately absorbed, according to the current occupancy trends.
Despite the percentage of pre-leased spaces being lower than in 2020 (between 55% and 60%), Eri Mitsostergiou, director of European Research at Savills, mentioned that demand for quality work spaces is a priority for occupants, who are unable to find correspondence in an offer that remains short of the occupancy expectations.
In cities like Berlin, Stockholm, Amsterdam, Paris and Munich, the availability rate in office spaces dropped to less than 6%, on what are considered to be the most competitive rental markets.
In Portugal, Lisbon’s office availability remains at around 7%, behind Barcelona, which registers an 8.5% availability rate.
It is also expected for an increase in secondary offer to generate an increase in the office space availability rate within the European markets. There is, however, the chance that this increase in offer is unable to meet the occupants’ current demands, especially concerning the ESG and digital sustainability indicators.
Savills predicts that the average availability rate in Europe will reach 7.5%, with cities such as Warsaw and Bucharest leading in terms of the markets with more spaces available, both with availability rates set at around 11%.
The gradual return to the offices will also bring some space remodelling, with a greater focus on the workers’ safety and well-being.
Ana Redondo, Associate Director at Savills Portugal, pointed out that «offices will not necessarily have their areas reduced, but the distribution will need to be different and they will continue to play a fundamental role in reinforcing the companies’ values and culture». She further added that «conventional jobs’ work spaces will need to be converted into spaces that further stimulate creativity and group cooperation and where informal contacts boost exchanges of experiences, information and knowledge».