Shortage Of Large Office Suites Threatens European Expansion Plans

LONDON, July 20, 2015 – It is harder than ever to find good new large (5,000 sqm plus) office suites in many of Europe’s major cities, which poses a real threat to companies expansion plans, according to research published by global property experts, Colliers International. The 5,000 sqm Report reveals that availability of larger office premises in 22 key European markets has decreased by 12 per cent in the last 12 months with the largest falls seen in Moscow, Central London, Berlin, Frankfurt, Madrid and Lisbon.

Simon Ford, Director, EMEA Corporate Solutions at Colliers International commented: “In recent months we have seen clients lose their favoured options by delays in their decision making process. We are advising our clients to be pro-active in their key city metro strategies we expect to see an increase in pre-let activity as a result.”

Ford continues:  “Corporates are facing a lack of choice; especially when it comes to a central location.  Our research tells us that only 19% of the options available were in central business districts. And we expect further constraint on the back of increased demand for space fuelled by an improving economic situation across Europe.

“To this end we see supply of large office spaces becoming scarcer. So timing will be critical.  In fact, we are advising our clients to start pro-actively looking at their needs in the next five years and to review their decision making timeframes to ensure they do not lose out on their preferred options.”

Explaining the key trends regarding geography, Ford adds:  “Moscow quite literally tells a tale of two cities; it offers the highest number of large newly-built premises in Europe (50 out of 60 available larger offices in completed buildings). However, the city has recorded a significant decrease in the availability of large under construction premises.”

“What’s also interesting is the picture in Central London has seen a sharp reduction in the total number of large offices available (down from 60 to 44) within the past year. The relative quality of what is available has also fallen. Occupiers prepared to look beyond Central London will have a much wider choice.

Highlights form the Colliers Data include:

Ford concludes:  “Europe’s economy is moving again after years of decline, hesitation and stagnation. In light of this, we expect large corporate occupiers to increase their headcount and commit to new office space in 2015, particularly in markets such as London, the major German cities, Stockholm, Warsaw and Budapest.   However, we predict that older buildings which do not meet occupiers’ high standards and exacting demands will become obsolete and will be refurbished, or converted for residential or hotel uses.”