OR market office Athens maintains low activity, with the availability rate remaining stable at 10%.
According to a survey by Colliers International, rents reach 35 euros / sq.m. with slight upward trends. Despite stagnation, demand in the offices market focuses on modern, upgraded downtown spaces, while secondary areas require more incentives to attract tenants.
The highest rental prices are recorded in London – City (97.4 euros / sqm), Milan (62.5 euros / sqm) and Paris (68.0 euros / sqm), while the most affordable markets are in addition to Athens and Budapest (25.5 euros / sqm).
In terms of availability, Berlin (7.9%), Madrid (9.6%) and Stockholm (8.2%) exhibit relatively balanced conditions, while Vienna and Cologne maintain percentages below 4%, a sample of high absorption. The total office area under construction is constantly reduced by mid -2022.
Significant decline is recorded in Madrid, London (Mid Town), Bristol and Gdansk, while areas such as Antwerp, Johannesburg and Ljubljana have increased construction activity.
Fluctuations in demand and investment
Office markets in the EMEA region (Europe, Middle East and Africa) continue to recover, though at different speeds. In the fourth quarter of 2024, 48% of markets recorded an increase in total annual absorption of spaces, while just over 50% declined. Overall, absorption increased by 2.7% on an annual basis.
The Paris market in La Défense made a striking return, with nearly 82,000 sq.m. Absorption of spaces in the fourth quarter. Other cities that have made significant growth on a quarterly basis include Amsterdam, Berlin, London (Southbank) and Bratislava.
In general, demand remains sluggish, which is reflected in markets where conditions are favorable to tenants, representing 42% of the EMEA area.
Neutral markets are expected to increase from 34% today to 35% to the fourth quarter of 2025, while markets favoring the owners will increase from 24% to 25%, reflecting the expected slow recovery.
Turn to higher quality offices in the center
Tenants continue to take advantage of their premature expiration potential to upgrade their spaces while reducing their size.
Modern buildings in attractive locations remain the most sought after, while older properties in secondary areas require more and more incentives, such as free rentals.
The gaze is still high, as the demand for high quality areas in central locations is intense. This trend is expected to continue as the offices are adapted to provide modern, efficient and high performance facilities.
Decreased Construction Activity and Project Completions
The surface of the office spaces under construction as well as the project completions have been downward in the EMEA area since mid -2022, and this continued in the fourth quarter. However, there are big differences between markets.
A significant decline in building activity occurred in Madrid, London (Mid Town), Bristol and Gdansk, while increased construction activity was recorded in medium -sized markets, such as Antwerp, Johannesburg, Ljubljana and Lublin.
Constant percentage of empty spaces at 8.9%but slightly over the long -term average
The total percentage of gaps in the EMEA area has been in an upward trajectory since late 2019 and stands at 8.9%, slightly above the long -term average of 8.5%.
Markets with particularly low availability rates (below 4%) include Vienna, Cologne and Eindhoven.
Correspondingly, in markets such as Rome, London (Kings Cross), Hamburg, Stuttgart, The Hague, Antwerp and Oslo, availability remains below 7%.
Increase rents due to limited supply of quality spaces
Colliers’ high standard rental index in the EMEA area continues to record a strong rise, following the trend in mid -2021. In the fourth quarter, an annual increase of 6.4% and a quarterly rise of 2.0%.
A significant increase in rents in central business areas (CBD) was recorded in Eindhoven and Edinburgh, while reductions were observed in Cologne, Porto and Pozan.
Recovery in offices investment as values improve
On the investment front, the office sector closed in 2024 with transactions of € 48 billion, up 4.7% compared to 2023, but remaining 53% below the average of the 2019-2023 period. Although the share of the office sector in total transactions decreased by almost 45% in 2019 to below 20% in 2024, the second half of the year was recorded a stable flow of transactions.
The correction of office prices in Europe in recent years seems to have stabilized, with some capital values increases due to the rise of rents to high -end areas and the shrinkage of yields in the second half of 2024. Expectations for further raising rents place the industry in 2025.
Great transactions in many purchases
Despite the challenges, major investment agreements continue. In Germany, four office buildings were sold over 100m euros in the fourth quarter, while in Poland the largest transaction of the year was recorded, with the acquisition of Warsaw Unit by Eastnine for € 280m. Correspondingly, in the United Kingdom, Greycoat bought 90 Holborn for $ 180 million.
Finally, investors continue to seek opportunities for upgrading their real estate or conversion to other uses, such as acquiring a building in Copenhagen by ECE, in order to convert it into a luxury hotel.