During the first half of 2022, office take-up in the European market reached 4.3 million sqm, 11% above the five-year average for the same period, according to the latest Savills study.
In line with the first half of 2021, professional and business services continues to be the most active sector, with a 21% share of total take-up, followed by the ICT sector, with 20%, which has seen a year-on-year increase of 6%.
On the supply/demand side, the European office market remains undersupplied, with cities in France and Germany leading the way with the lowest vacancy rates of between 2% and 5% in Paris, Berlin, Cologne, Hamburg, Brussels, Munich and Stockholm.
Despite the climate of economic uncertainty, the international real estate consultancy notes that there remains a strong demand for high quality space in good locations from companies looking for spaces that enhance the fit of workspace with company culture and corporate sustainability objectives.
Office investment in Europe
Offices reached a volume of €43 billion in the first half of 2022 in Europe, in line with the average for the first half of the last five years, according to Savills. Although the volume of real estate investment in Europe declined in the second quarter of 2022, this asset class still accounts for the largest share of total investment, registering 31% in the first half of 2022.
In the comparison by country, the Spanish market remains in the top 10 for office real estate investment growth, ahead of markets such as Germany (+9%) or France (-15%), by registering 1,250 million euros, a figure that is 10% above the average of the last five years and 18% more in year-on-year variation.
The report notes that the number of office transactions in Europe has slowed in July, according to RCA data, and that this is partly due to investors being more selective in the current context and the quality product they are looking for in prime locations is scarce.
Hipólito Sánchez, executive director of the office division at Savills Spain, explained that "despite the signs of economic slowdown, the good news is that there is an unprecedented level of liquidity in the market, much of which will be attracted to our sector".