According to The European Office Index of Jones Lang LaSalle, European office rentals have fallen marginally for the first time since the fourth quarter of 2009. In the first quarter of 2012, rentals in primary offices fell 0.3%.
In many major rental markets, the net reduction disguised both rises and declines. Rent declines were reported in Brussels (-5.0%), Madrid (-1.9%), Barcelona (-1.4%) and Paris (-1.2%), and in Luxembourg (+5.3%), Stockholm (+2.4%), as well as in Hamburg (+2.1%). used car for sale
The rental markets will continue to be steady.
As a result of the reduced economic prognosis for the area as a whole, development expectations were lowered downwards for 2012. More stable markets, like the UK and Germany, are projected to fare well, while emerging countries, like Greece, Portugal, Spain and Italy, will continue to confront labor markets and rental pressure. The office clock at Jones Lang LaSalle shows the spread of the first markets across the country at 12 p.m. and suggests that its next step is lowered rental, with 14 markets either at or before six p.m., which means that rents are either on their way to deepening or stabilizing.
Leasing is constant although it is anticipated that 2012 would be lower than 2011.
Office workers are anticipated to remain cautious in the short term, with lease rates expected to be much lower in 2012 than in 2011, but being in line with long-term norms. In the first quarter of 2012 incomes amounted to 2,3 million sq m, down 15 percent from the first quarter of 2011, leasing volumes in Germany decreased last year and Paris decreased by 18 percent.
Absorption has fallen by 16% from the first quarter of 2011.
The net annual absorption, measuring the change in the occupied stock, amounted to 3,1 million m2, down 16% from Q1 2011. Due to strong performance on German markets, the levels of Western Europe grew while absorption in the CEE area lagged.
The vacancy rate was maintained at less than 10 percent notwithstanding the low level of completion.
Over the quarter, the vacancy rate in European markets stayed constant at 9.9 per cent, with a stable aggregate vacancy in Western Europe, but increased vacancy on CEE markets as occupiers released second-hand space. Budapest saw the biggest increase with an increase of +110bps to 20.3 percent.
EMEA Offices Research Director Jones Lang LaSalle, Bill Page, says the World Property Channel, "Vacancy rates in 2012 as a whole will steadily decrease. This is financed because of the little amount of new space added to the markets. In the first quarter of this year Europe has just approximately 600,000 sq m of office space, another low and 54% lower than the five year average. As funding is still short, the typically anticipated development response is projected to be sluggish. In addition, many companies that are being developed on a speculative basis might be postponed or terminated and inventories that are already on the market are often ready."
Office investment transactions totalled €13 billion in the first quarter of 2012.
Office transactions were over 13 billion euros of a total volume of 21,6 billion euros in the first quarter of 2012, up 27 percent from the first quarter of 2011. The weighted European office performance remains steady at 5.27 percent as two markets move: In Budapest, yields climbed 50 basis points as investor's confidence in the economy went down, while robust investor demand for basic commodities led in a 10-point reduction in Hamburg.
Chris Staveley, Head of EMEA Office for Jones Lang LaSalle Industrial Capital Markets, adding, "Capital prices have risen by 3.8 percent since the first quarter of 2011, which together with the stability of yield and demand show an ongoing improvement. Rental increases in sought-after premium buildings would drive any expansion in Europe, with minimal secondary product interest."