Europe’s office hotspots: Seven submarkets in high demand
Some office submarkets in Europe’s big cities are attracting high levels of interest from investors and companies looking for space to lease.
Low vacancy rates and modest development of office space are continuing to drive above-average rental growth in submarkets of some of Europe’s major cities.
Submarkets in Amsterdam, Stuttgart, Prague, Munich and Stockholm remain among Europe’s office hotspots, with an average annual rental growth of 11.3 percent compared to the European average of 5.5 percent.
“These office hotspots, first flagged at the start of 2018, remained in high demand during the course of the year with a limited supply side playing an increasingly important role in driving rental growth,” says Alex Colpaert, JLL Head of EMEA Offices Research.
“A serious lack of choice and rising occupancy costs in core locations have pushed occupiers to consider options beyond the main business district,” he says. “More broadly, factors such as talent and innovation cannot be undervalued when considering the trajectory of rental growth across Europe’s major office markets.”
The gap between selected submarkets and established office districts is, says Colpaert, narrowing. However, finding markets that can offer rental growth in the long-term will be crucial for investors.
“It’s about identifying structural improvements rather than just rental growth,” he says. “Factors such as infrastructure and connectivity also play a part in occupier decisions when relocating.
“How people move - and work - will determine the champions in terms of submarkets.”
Ahead of the 2019 edition of our Rental Growth Hotspots report being released, view the video to find out more about Europe’s most in-demand submarkets.