Europe Office Real Estate Market Size
| Study Period | 2019-2028 |
| Base Year For Estimation | 2022 |
| Forecast Data Period | 2024 - 2028 |
| Historical Data Period | 2019 - 2021 |
| CAGR | > 4.00 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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Europe Office Real Estate Market Analysis
The Europe office real estate market is poised to register a CAGR of more than 4% during the forecast period.
- The performance of the European office real estate market is strongly connected to the growth of the region’s economy. Though the European economy is recovering from the consequences of the COVID-19 pandemic, the office real estate industry may take some time to reach normalcy.
- Occupier demand has slowed, and uncertainty has increased, resulting in a 40% drop in office take-up in 2020 compared to 2019. Offices were not expected to be fully occupied until at least the end of 2021. However, as uncertainty related to the pandemic lessened, take-up was projected to increase by 7% in 2021 over 2020. Barcelona (59% p.a. in 2020-2021), Paris Central Business District (CBD) (52%), Cologne (42%), and Central London (29%) are estimated to see a faster recovery in office leasing activity.
Europe Office Real Estate Market Trends
This section covers the major market trends shaping the Europe Office Real Estate Market according to our research experts:
Offices Remain a Core Sector
Although the COVID-19 pandemic has changed the way people work, there is still a high demand for office space. According to INREV, a European organization that shares knowledge of the non-listed real estate business, offices are still a favored asset category for European investors, particularly those headquartered in France and Germany.
Prime rents increased by 0.5% on average in Q3 2021, following increases of 0.3% in Q2 2021, and 0.1% in Q1 2021. For the first time since the pandemic in Q2 2020, annual growth has been positive, with rents being 0.3% higher Y-o-Y. No markets saw a decrease in rentals throughout Q3 2021. Yields continue to fall, albeit slowly, with the European prime yield falling by 3 basis points to a new low of 4.16% in the third quarter.
Rise in Rental Prices of Office Properties in European Cities
The office market has historically been the most popular asset type among real estate investors, accounting for 40-50% of the total investment volume. The major share of European investment activity is concentrated in Paris and London, as well as Germany's big four (Berlin, Frankfurt, Munich, and Hamburg).
Central Paris garnered EUR 3.8 billion (USD 3.9 Billion) in investments in Q2 2021, which was EUR 500 million (USD 513.7 million) higher than Central London. The London Stock Exchange is one of the world's largest foreign exchange markets, and many major global companies, such as HSBC, BP, Unilever, and Barclays, are headquartered in this region. London’s office real estate sector has historically been one of the most competitive, with prime yields as low as 3.5% as of Q3 2020. Yields in Germany's big four were significantly lower, at less than 3%.
Europe Office Real Estate Industry Overview
The office real estate market in Europe is relatively fragmented. The market is anticipated to regain normalcy by the end of 2023. Companies are gearing up to meet future needs, and many companies are entering the market for further opportunities. Hochtief Aktiengesellschaft, AF Group ASA, JLL, Cushman & Wakefield, Engel & Völkers Germany, etc., are major market participants in the Europe Office Real Estate Market.
Europe Office Real Estate Market Leaders
Hochtief
Aroundtown SA
Gecina
Engel & Völkers Germany
Savills
*Disclaimer: Major Players sorted in no particular order
Europe Office Real Estate Market News
- November 2022: Balfour Beatty announced that its 50:50 joint venture, Gammon, has been granted an HK Dollar 2.6 billion (USD 0.33 Billion) contract to develop a new office complex in Causeway Bay, Hong Kong, on behalf of Mandarin Oriental Hotel Group. Gammon will be responsible for the construction of a new 25-story office skyscraper with adjacent retail facilities as part of the contract. Footbridges will also be constructed to connect the office building to the World Trade Centre Hong Kong and a shopping center.
- November 2022: Strabag Real Estate announced the development of Upper One, an office and hotel complex at the junction of ul. Grzybowska and Jana Pawła II, on the site of the out-of-use Atrium International office building. The project, involving the construction of a 34-story high-rise building and a 17-story hotel, will be completed in 2026. Upper One will offer 35.9 thousand sq. m. of office space and approximately 11 thousand sq. m. GLA of hotel space.
Europe Office Real Estate Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET DYNAMICS
4.1 Market Overview
4.2 Market Drivers
4.3 Market Opportunities
4.4 Market Restraints
4.5 Value Chain / Supply Chain Analysis
4.6 Industry Attractiveness - Porter's Five Forces Analysis
4.6.1 Threat of New Entrants
4.6.2 Bargaining Power of Buyers/Consumers
4.6.3 Bargaining Power of Suppliers
4.6.4 Threat of Substitute Products
4.6.5 Intensity of Competitive Rivalry
4.7 Government Regulations and Initiatives
4.8 Technological Trends
4.9 Insights into Rental Yields in the Office Real Estate Segment
4.10 Insights into the Key Office Real Estate Industry Metrics (Supply, Rentals, Prices, Occupancy (%)/Vacancy (%))
4.11 Insights into Office Real Estate Construction Costs
4.12 Insights into Office Real Estate Investment in Europe (in Major Cities)
4.13 Impact of COVID-19 on the Market
5. MARKET SEGMENTATION
5.1 By Geography
5.1.1 Germany
5.1.2 United Kingdom
5.1.3 France
5.1.4 Italy
5.1.5 Spain
5.1.6 Russian Federation
5.1.7 Rest of Europe
6. COMPETITIVE LANDSCAPE
6.1 Market Concentration Overview
6.2 Company profiles - Real Estate Players
6.2.1 JLL
6.2.2 Cushman & Wakefield
6.2.3 CBRE
6.2.4 Savills
6.2.5 Engel & Volkers Germany
6.3 Company Players - Developers
6.3.1 STRABAG International GmbH
6.3.2 Hochtief
6.3.3 AF Group ASA
6.3.4 Aroundtown SA
6.3.5 Soares da Costa
6.3.6 Gecina*
7. MARKET OPPORTUNITIES AND FUTURE TRENDS
8. APPENDIX
Europe Office Real Estate Industry Segmentation
Office real estate is the construction of buildings for leasing and selling purposes to companies from different sectors. The Europe Office Real Estate Market is segmented by Geography (Germany, United Kingdom, France, Italy, Spain, Russian Federation, and the Rest of Europe). The report offers the market sizes and forecasts for the European office real estate market in value (USD Billion) for all the above segments.
| By Geography | |
| Germany | |
| United Kingdom | |
| France | |
| Italy | |
| Spain | |
| Russian Federation | |
| Rest of Europe |
Europe Office Real Estate Market Research FAQs
What is the current Europe Office Real Estate Market size?
The Europe Office Real Estate Market is projected to register a CAGR of greater than 4% during the forecast period (2023-2028).
Who are the key players in Europe Office Real Estate Market?
Hochtief, Aroundtown SA, Gecina, Engel & Völkers Germany and Savills are the major companies operating in the Europe Office Real Estate Market.
Europe Office Real Estate Industry Report
Statistics for the 2023 Europe Office Real Estate market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Europe Office Real Estate analysis includes a market forecast outlook to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.
