There’s an increasingly autumnal feel to parts of the EMEA market but I’m not convinced we’re about to start hibernating just yet. In fact, depending where you look, there are actually some signs that activity may increase in the weeks ahead.
Occupiers for example are still very much preoccupied with driving down costs and with rents at such low relative levels, the opportunities open to them can be significant.
The Real Cost of Space – Office Rents in Western Europe
“net effective office rents are at a 5 year low, real rents are back at 1998 levels”
Some may also start to think about how they can drive top line performance not just bottom line savings, by taking better space to help drive productivity.
We are already hearing from some companies ready to consider this. Whilst in the minority, they are typically SME’s rather than larger corporations and we’re still talking about a net cost saving in any move.
If you buy into the view that corporate activity will increase in the year ahead and you recognise that falling availability will swing the balance of power towards landlords, then the rationale for acting early is clear.
All the same, that “window of opportunity” for occupiers will be open for a little while yet, with plenty of pre-let potential for example even when Grade A availability is falling. So for now at least, tenant power remains strong!
European Research Group,