It has been a time of corporate growth and expansion into new markets for occupiers, supported by strong investment markets – for most of the year.
But in 2008 the balance of power will shift to the occupier.
This year has been marked by increasing rents, limited stock, business expansion and corporate growth. Finding good space has been tough, as demonstrated by several factors:
- In three-quarters of the 24 biggest European cities, vacancy rates fell again in the third quarter, despite the fact that about 60m sq ft is set to be finished by the end of the year.
- Office rents increased, on average, more than 10% year on year.
- Office take-up in the third quarter of 2007 reached an all-time high of more than 100m sq ft across Europe. Take-up in some markets, such as Germany, increased by 25%.Occupiers have funded their growth mainly through expansion. They have used property to raise capital and have oursourced real estate services. Sustainability will also be a key factor in occupiers’ real estate strategies.
Robert Bonwell is head of corporate solutions at Jones Lang LaSalle