Reduced occupancy footprints and an upgrade to better-quality space are two global trends that show no sign of letting up anytime soon. From New York to London to Hong Kong, business leaders continue to monitor their real estate costs and no longer tolerate “wasted space.” But cost is not the only way to achieve efficiency. Floor-plate size, design and layout, and collaborative work spaces typically not found in older office stock are key factors that companies around the world see as promoting increased productivity and workplace satisfaction.
EUROPE: POSITIVE SIGNS
After a weak start to the year, Europe has stabilized. 2013 marked the end of the Eurozone recession, and both business and consumer confidence is on the mend. Growth projections have been raised for 2014/15 although the regional picture will still be one of below trend growth overall with significant differences market to market.
In the office markets, there is a clear divergence between primary and secondary space. The supply of modern space is beginning to dwindle, particularly in major international cities like London, Stockholm and Frankfurt, as tenants demand the best-quality space. As a result, developers are now pushing ahead with any schemes they have in the pipeline, resulting in a modest increase in new completions in 2014 which, with net absorption still low, will result in an uptick in vacancy in some markets.
(This article features excerpts from the full report – please download it here)