CB Richard Ellis Group, Inc.'s forthcoming market report - EMEA Offices Market View - indicates that European office rents are continuing to rise in a number of markets, despite reduced leasing activity reflecting occupier caution.
The CB Richard Ellis EU-27 Rent Index rose by 1.9% in the first quarter of 2008, maintaining a year-on-year growth rate of 9.3%. The picture, however, remained mixed across the region with evidence that rental growth for some individual cities has peaked, and in some cases, rents are static or falling. Among the major Western European markets some upward movement is still evident in Paris, Madrid and Amsterdam. Several of the major Central and Eastern European (CEE) markets, such as Moscow and Prague, are also seeing solid growth although annual rates of increase in this region are easing. Downward pressure on rents is most acute in London, particularly in the City, where prime rents dropped by over 7% in the first quarter. The major German markets, along with Brussels, Stockholm and Dublin, saw no change in prime rents over the quarter.
Short-term weakening of the major European economies is starting to be reflected in leasing activity. Aggregate take-up for the main 15 markets totalled 2.0 million m