European office occupier market 2022

Local experts across the Knight Frank network have analysed the latest occupier activity in their region, revealing a healthy demand for prime office space across Europe. 

Updated quarterly, the dashboards provide a concise synopsis of occupier activity in Europe's markets. Discover vacancy rates, up take and prime rents from cities across Europe in more detail by exploring the dashboard for Q1 2022 at the bottom of each section. 

Paris

After the rebound in the second half of 2021, the recovery of the Paris office market was confirmed in the first quarter of 2022. Take-up in the Paris CBD was 52% higher than in the same quarter the previous year due to the sustained demand from occupiers in the finance, luxury, consulting and co-working sectors.

The Paris Central Business District (CBD) benefits from quality of supply on the market. The five transactions over 5,000 sqm in the first quarter were all for recently delivered assets or assets undergoing redevelopment.

The vacancy rate in the Paris CBD was at 3.9%. Despite the continued launch of new projects, vacancy is expected to remain low due to sustained occupier demand and the focus on central locations and accessibility since the start of the pandemic. This keeps upward pressure on prime rents which reached €940 psqm per year in the CBD in the first quarter.

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Barcelona

The Barcelona office market recorded a take-up of around 95,000 sqm in the first quarter of 2022. This is almost 20% higher than in the same quarter the previous year. Between 50% and 60% of the office space demand targeted new business districts in the city, especially the 22@ district and the city centre.

The office vacancy rate has remained stable at 7.0% since the end of 2020. Given the positive leasing activity, prime office rents held up well at €336 psqm per year. As employment has returned to pre-pandemic levels, this will help sustain rents in Barcelona.

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Berlin

Berlin office take-up reached around 150,000 sqm, which was nearly 25% below the level in the first quarter of 2021. This is because the medium- and large-size segment fell short of last year's result. There were no deal transactions above 10,000 sqm.

The rise in total vacancy is slowing. Meanwhile, the supply of space in attractive locations remains very limited. Prime office rents held firm at €43 psqm per month, while the average rents increased slightly to €28.10 psqm per month. If incentives are provided, they range from 1-3 months.

With vacancy still on a low level, the Berlin office market remains a landlord market. Completions amounted to 170,000 sqm of which 87% was pre-let. An additional 700,000 sqm is expected to be completed over the course of the year, with a pre-letting rate of 56%. Around 1.3 million sqm of office space in under construction but delays and rising prices are likely due to shortages of building materials.

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Madrid

The Madrid office market had a strong start to the year. Take-up reached 135,000 sqm, the best quarterly result since 2019 and a 93% increase over the same quarter the previous year. The trend in leasing activity is expected to continue this year, consolidating the sector which has been one of the most affected by the pandemic.

The vacancy rate remained stable at 12.0%, while the completed space amounted to 18,000 sqm. Prime office rents remained unchanged at €390 psqm per year and are expected to remain stable supported by the positive outlook for leasing activity.

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Munich

The Munich office market had a strong start to the year, with take-up reaching 194,000 sqm, almost double the level recorded in the first quarter the previous year. High demand, particularly in inner city locations has ensured that the prime rent settled at a historically high rent of €42 psqm per month.

The vacancy rate was 4.9% which means that the increase in vacant space we saw in the past three quarters has come to an end. In the first three months of the year, 250,000 sqm of new office space was completed. A further 500,000 sqm of space is currently under construction and is expected to be completed during the year. The strong start on the leasing market indicates that activity will remain high this year and that the previous year's result will likely be exceeded. Vacant space will remain scarce, particularly in inner city locations which will keep prime rents at a high level.

Discover more from the latest dashboard