In this quarter’s EMEA City Offices review, we highlight the following key areas:
- ECONOMY: By the end of 2019 what was the EU28 (EU27+UK) saw GDP growth weaken to 1.4%, down 0.6% on 2018. Increasing divergence between robust activity in the service sector and a struggling manufacturing sector became apparent over the year, denting GDP growth.
- EMPLOYMENT: The labour market remained resilient in 2019, expanding by 1.4% y/y, but employment growth is clearly slowing.
- TAKE-UP & PRE-LEASING: The 12-month rolling take-up for EMEA offices remained steady during 2019, declining by only -1.5% (y/y). While employment growth has sustained demand for office space, low availability and contracting vacancy rates have limited take-up.
- NEW DEVELOPMENT & PIPELINE: As of year-end 2019, the development pipeline for EMEA reached 17.9m sq m, up 20.1% from year-end 2018.
- VACANCY: The weighted vacancy rate average across EMEA was 5.3% in Q4 2019, down from 5.9% at year-end 2018. This represents the ninth consecutive quarter where vacancy has fallen.
- RENTAL GROWTH: The EMEA rental index grew by 3% Y/Y in 2019. Markets performing strongest for prime rents Y/Y included Warsaw, Frankfurt, Berlin, Cologne and Budapest.
This report also includes a macroeconomic overview, market supply and demand, rents and occupier conditions, country markets updates before finishing with our forecast.