Office Snapshot

H1 2014
EMEA

More Positive Outlook For Rents

Rental growth remains uneven across Europe, but overall the
tone of rental data appears to have improved in H1 2014, along
with the economic outlook. Of the 54 office markets monitored,
the majority (29) exhibited no change in rents (32 last year),
while 17 reported increases (9 last year). In contrast, 8 cities
(13 last year) saw reductions.
A number of trends were apparent:
Even if only marginally, prime rents moved ahead in
a number of Southern European markets like Madrid and
Lisbon, ending a correction which in Madrids case had
lasted since 2009.
The upward trajectory of rents over the last 18 months
underscores the recovery of Amsterdams prime office
district, amid an increasing gap between primary and
secondary markets in the Netherlands.
The German office market continued to show strength,
against expectations of rental growth moderating. Stuttgart
registered the largest jump (+25%) in prime CBD rents, while
Munich saw the seventh consecutive increase since H2 2010,
on a half-yearly basis.

Prime Rent Growth in Europe; H1 2014 on H2 2013

30%
25%
20%
15%

Reflecting the healthier state of the office market, Dubai

prime rents continued to rally and are now almost 20% up on
their cyclical trough; though still some way off their pre-crisis
peak (-40%).

Peripherals Lead Yield Compression

ECBs recent moves, the weight of capital now targeting
European real estate and rental growth expectations
contributed, in most instances, to stable or falling office yields
in the first half of 2014.
As expected, given current high levels of interest, yield
compression was observed in many peripheral markets like
Dublin (-75 bps), Madrid (-50 bps), Barcelona (-25 bps) and
Athens (-25 bps). Amsterdam also saw prime yields moving
in by 40 bps compared to the end of 2013, along with a sharp
increase in investment volumes. Prime yields also hardened
in a number of cities in CEE, notably Bucharest (-50 bps),
Budapest (-25 bps) and Prague (-25 bps), with the latter two
markets witnessing continued growth in investment volumes
and increasing levels of investor appetite in the first half of 2014.
In Europes core, the City of London was one the few markets to
see some degree of yield compression (-25 bps to 4.5%), under
the weight of new sources of Asian capital targeting the London
office market.

10%
5%
-0%
-5%
-10%
Stuttgart
Sofia
Vienna
Manchester
Dublin
Leeds
Antwerp
Belgrade
Hamburg
Amsterdam
Lisbon
Munich
Madrid
Stockholm
Moscow
St. Petersburg
Rome
Geneva
Paris
Prague
Kyiv
Milan
Athens

-15%

London is expected to continue to lead the rental upturn.

While prime rents were unchanged in H1 2014, dwindling
supply and growing occupier confidence is set to feed into
an increase in rental levels in the coming months. As the UK
economy continues to power-forward, rental growth is also
filtering through to regional office markets, with increases in
Manchester and Leeds.

Some of the trends outlined here are expected to continue in

the coming months, particularly the rally of values across most
of Europes periphery. As of H1 2014, cities expected to see
further yield compression in the next 12 months include:
Dublin, Manchester, Athens, Barcelona, Bucharest and Prague.

Office Snapshot | H1 2014 | EMEA | Colliers International

CITY

COUNTRY

MEASUREMENT

PRIME CBD 6 MONTHS

RENT
CHANGE %

ANNUAL
CHANGE %

OUTLOOK

Tirana
Vienna
Minsk
Antwerp

Albania
Austria
Belarus
Belgium

EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month

24.5
28.0
37.0
12.0

0.0
7.7
0.0
3.4

0.0
7.7
0.0
3.4

tu

Brussels

Belgium

EUR/sqm/month

21.0

0.0

0.0

Sofia
Zagreb
Prague
Copenhagen
Cairo
Tallinn
Paris
Berlin
Dsseldorf
Frankfurt
Hamburg
Munich
Stuttgart
Athens
Budapest
Dublin
Milan
Rome
Riga
Vilnius
Amsterdam
Eindhoven
Rotterdam
Krakow
Warsaw
Wroclaw
Lisbon
Bucharest
Moscow

Bulgaria
Croatia
Czech Republic
Denmark
Egypt
Estonia
France
Germany
Germany
Germany
Germany
Germany
Germany
Greece
Hungary
Ireland
Italy
Italy
Latvia
Lithuania
Netherlands
Netherlands
Netherlands
Poland
Poland
Poland
Portugal
Romania
Russia

EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
DKK/sqm/month
USD/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
USD/sqm/month

13.0
15.0
19.5
150.0
35.0
16.0
62.5
27.5
27.5
38.0
24.5
41.5
25.0
16.0
18.0
35.0
36.0
33.0
16.0
17.4
28.3
15.8
19.6
15.5
24.0
15.0
18.8
17.0
75.5

8.3
0.0
-4.9
0.0
-2.8
0.0
-3.8
0.0
0.0
0.0
2.1
1.2
25.0
-11.1
0.0
6.1
-10.0
-1.0
0.0
0.0
1.4
0.0
0.0
0.0
0.0
0.0
1.4
0.0
0.7

8.3
0.0
-7.1
0.0
-2.8
0.0
-6.3
1.9
0.0
2.7
4.3
2.5
23.2
-15.8
0.0
16.7
-13.6
-3.4
0.0
0.0
9.3
5.3
4.3
3.3
-4.0
0.0
1.4
-5.6
-0.4

Saint Petersburg

Russia

USD/sqm/month

54.3

0.2

Jeddah
Riyadh
Belgrade
Bratislava
Barcelona
Madrid
Stockholm
Geneva
Zurich
Istanbul
Kyiv

Saudi Arabia
Saudi Arabia
Serbia
Slovakia
Spain
Spain
Sweden
Switzerland
Switzerland
Turkey
Ukraine

SAR/sqm/year
SAR/sqm/year
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
EUR/sqm/month
SEK/sqm/year
CHF/sqm/year
CHF/sqm/month
USD/sqm/month
USD/sqm/month

1,325.0
2,300.0
17.0
14.5
17.5
24.8
5,650.0
835.0
65.0
45.0
32.0

Abu Dhabi

United Arab Emirates

USD/sqm/month

Dubai

United Arab Emirates

USD/sqm/month

Belfast
Birmingham
Bristol
Edinburgh
Glasgow
Leeds
London City
London West End
Manchester

United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom
United Kingdom

GBP/sqft/year
GBP/sqft/year
GBP/sqft/year
GBP/sqft/year
GBP/sqft/year
GBP/sqft/year
GBP/sqft/year
GBP/sqft/year
GBP/sqft/year

9.50%
3.80%
14.50%
7.00%

0
30
0
-25

n/a
30
50
-25

tu

tu

17.0
19.5
34.5
10.5

tu

15.0

6.00%

tu

9.50%
n/a
6.25%
5.25%
9.00%
7.50%
4.00%
4.50%
5.10%
4.85%
4.50%
4.25%
5.10%
8.25%
7.50%
5.50%
5.90%
6.50%
8.00%
7.75%
6.10%
n/a
6.80%
7.50%
6.00%
7.00%
8.00%
7.75%
8.50%

0
n/a
-25
25
0
0
0
0
0
0
-20
0
-10
-25
-25
-75
0
30
0
0
-40
n/a
-20
0
0
0
0
-50
0

50
n/a
-25
25
0
0
-25
-50
0
-30
-20
0
-10
-25
-25
-100
20
50
0
-25
-40
n/a
-50
0
0
0
0
-75
-50

tu

tu

9.0
12.0
n/a
108.3
21.5
14.5
n/a
19.0
21.2
32.0
22.5
30.5
18.0
11.0
12.5
33.0
28.5
26.0
12.0
14.6
18.3
11.3
11.9
13.7
n/a
13.5
14.8
n/a
48.3

0.2

tu

37.4

9.00%

tu

1.9
15.0
3.0
0.0
0.0
1.0
0.9
-1.8
0.0
0.0
-8.6

-3.1
0.0
3.0
0.0
-2.8
0.0
0.9
-5.1
4.0
0.0
-8.6

tu

1,075.0
1,400.0
15.5
11.0
14.0
22.3
4,700.0
590.0
43.0
31.0
n/a

9.00%
10.00%
9.00%
7.50%
6.00%
5.50%
4.50%
4.50%
3.60%
7.00%
12.00%

-100
50
-50
0
-25
-50
0
25
-20
0
100

-100
0
-50
0
-50
-75
0
25
-20
0
100

tu

39.0

0.0

1.0

tu

30.8

10.00%

tu

51.8

10.4

17.7

tu

34.5

10.00%

tu

14.0
28.5
27.5
27.5
29.0
27.0
60.0
120.0
32.0

0.0
0.0
0.0
0.0
0.0
3.8
0.0
0.0
6.7

0.0
3.6
0.0
0.0
0.0
3.8
4.3
9.1
6.7

tu

12.8
22.0
24.0
21.0
27.0
21.0
50.0
92.5
25.0

6.25%
5.75%
6.25%
6.00%
6.00%
6.25%
4.50%
3.75%
6.00%

0
0
0
0
0
0
-25
0
0

0
-25
0
0
0
-25
-75
-25
0

tu

* German, Dutch and Spanish prime yields are gross, not net.

AVERAGE
6 MONTHS
ANNUAL
PRIME YIELD
OUTLOOK
CBD RENTS
CHANGE BPS CHANGE BPS

Office Snapshot | H1 2014 | EMEA | Colliers International

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485 offices in
63 countries on
6 continents
United States: 146
Canada: 44
Latin America: 25
Asia Pacific: 186
EMEA: 84

Contacts:
Craig Satchwell
EMEA Office Business Team Leader
Head of West End Offices
TEL +44 207 487 1774
craig.satchwell@colliers.com
Bruno Berretta
Senior EMEA Research Analyst
TEL +44 207 344 6938
bruno.berretta@colliers.com

Colliers International

$2.1

billion in
annual revenue

50 George Street
London W1U 7GA
United Kingdom
TEL +44 20 7487 1645
emea.research@colliers.com

1.46

billion square feet

under management

15,800

professionals
and staff

About Colliers International

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Copyright 2014 Colliers International.

The information contained herein has been obtained from sources deemed reliable. While every reasonable effort has been made to
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