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RESEARCH
EUROPEAN OFFICE MARKET
2015
PROPERTY DEVELOPMENT
TRANSACTION
CONSULTING
VALUATION
PROPERTY MANAGEMENT
INVESTMENT MANAGEMENT
Contents
Office Market
4
Lyon
28
Investment Market
6
Madrid
29
Amsterdam
8
Manchester
30
Athens
9
Marseille
31
Barcelona
10
Milan
32
Belgrade
11
Moscow
33
Berlin
12
Munich
34
Birmingham
13
Oslo
35
Bratislava
14
Central Paris
36
Brussels
15
Prague
37
Bucharest
16
Riga
38
Budapest
17
Rome
39
Dublin
18
Saint Petersburg
40
Frankfurt
19
Stockholm
41
Geneva
20
Tallinn
42
Hamburg
21
Vienna
43
Helsinki
22
Vilnius
44
Istanbul
23
Warsaw
45
Lille
24
Zurich
46
Lisbon
25
Glossary
48
Central London
26
Contacts
49
Luxembourg
27
Editorial
Brighter economic prospects for Europe clouded by
political uncertainties.
The global economic situation has never been as
supportive to European economic growth as now. At the
same time, many significant geo-political events will be
ongoing across Europe in 2015.
Indeed the ongoing conflict in Ukraine is not solved and
will be the fundamental external issue for the European
Union to deal with in 2015. The recent electoral victory
by the far left Syriza party in Greece has brought, again,
the Greek debt crisis to the fore. However we believe it
will have less impact on the European economy this time
round given the concentration of its debts in the hands of
government institutions. Nonetheless it is still uncertain
as to how the situation will evolve over the next few
months. Going forward, the Spanish and UK elections
could have a significant impact. In Spain recent polls of
voter intention show that the left wing Populist Party,
Podemos, is ahead of its rivals. Like Syriza in Greece, it
seeks to address the economic malaise that followed in
the wake of the European debt crisis. The upcoming UK
election could be equally critical because of the promise
by the Conservative party of an “in/out” referendum on
EU membership if they are returned to power.
Despite these strong political uncertainties, there is
reason to be optimistic for economic development in
2015. As inflation in the Eurozone is moving deeper into
negative territory, the European Central Bank (ECB) has
just started its quantitative easing (QE) policy which has
already had a significant impact. Divergent expectations
in central bank policy now exist. Hikes in interest rates
are expected to start in 2015-2016 in the US and the UK
and the start of QE in the Eurozone has led to a sharp
depreciation of the Euro against the major currencies.
With the decrease in oil prices likely to be sustained
for some time, there are now strong structural pillars
that will support the Eurozone. Following the strong UK
recovery, Europe’s economic growth expectation is poised
to strengthen in 2015.
On the back of these positive economic developments,
we expect that the fundamentals in most European office
markets will improve significantly in 2015.
Christophe PINEAU
MRICS
Head of International Research
Office Market
The European office market started to grow again in 2014
The improvement of economic conditions and the better labour
market performance in 2014 positively impacted the office
markets in Europe. Office take-up in our sample of 35 European
cities totalled closed to 11.7 million m² in 2014, rebounding
by 10% over twelve months. The re-emergence of large deals
supported strong results in most markets, especially Central
Paris, Berlin and Brussels. Cost reduction and rationalisation
remained the main drivers of demand and occupiers continued to
favour new buildings in well-located areas.
Despite a significant rise in office take-up, the average vacancy
rate only decreased by 10 basis points and still stood above
the 10% threshold. Overall, vacant space reduction was offset
by a stronger level of completions and relocation of tenants led
2014
Amsterdam
Athens
Barcelona
Belgrade
Berlin
Birmingham
Bratislava
Brussels
Bucharest
Budapest
Central London
Central Paris
Cologne
Dublin
Düsseldorf
Edinburgh
Frankfurt
Geneva*
Glasgow
Hamburg
Helsinki*
Istanbul*
Lille
Lisbon
Luxembourg
Lyon
Madrid
Manchester
Marseille
Milan
Moscow
Munich
Oslo
Prague
Riga*
Rome
Saint Petersburg
Stockolm*
Tallinn*
Toulouse
Vienna
Vilnius*
Warsaw
Zurich*
229,900
n.a
233,700
53,900
609,000
66,300
155,000
437,800
233,800
251,600
1,490,900
1,807,800
241,000
246,900
325,000
80,100
411,000
-40,800
85,500
513,000
23,600
469,600
165,800
126,500
214,300
242,600
370,100
189,100
126,400
275,300
506,900
597,000
100,000
189,100
39,300
110,800
189,100
175,000
17,700
139,900
250,000
34,300
400,000
31,200
Take-up (m²)
2013
236,200
n.a
172,900
25,800
453,000
61,700
80,000
314,600
173,900
190,600
1,199,300
1,597,400
276,000
195,700
415,000
68,200
493,000
-21,000
77,200
440,000
9,500
323,800
171,400
77,800
150,000
251,700
365,200
160,600
106,700
231,500
523,300
603,000
110,000
151,000
12,300
159,900
153,900
17,900
35,300
109,800
300,000
30,400
451,000
31,200
*Net absorption - Note: Conversion rates as at 31st of December 2014
2012
234,500
n.a
157,000
48,900
548,000
46,500
55,000
442,000
243,200
174,100
919,600
2,024,000
261,000
145,000
346,000
54,900
580,000
-53,400
44,200
435,000
-118,100
263,200
160,300
102,000
147,500
189,300
253,600
156,600
156,400
241,400
991,200
715,000
160,000
125,000
28,800
66,500
141,100
48,800
32,100
129,600
320,000
15,500
441,000
136,400
to further release of second hand premises onto the market.
However, the dearth of new supply in central areas kept rental
values under pressure for prime properties. Consequently, the
average prime rent rose (+3%), boosted by strong rental growth
in buoyant markets like Central London and Dublin. The great
contrast is that peripheral office districts still suffer from
abundant vacancy and significant incentives have to be offered
by owners to prevent decline in rental values.
Economic growth and employment growth in Europe are expected
to gain more momentum in 2015. Accordingly, office market
fundamentals are likely to strengthen throughout the main cities
in Europe.
Q4 2014
17.3
13.0
15.4
9.0
4.7
11.1
13.8
10.3
12.6
16.2
5.1
8.3
6.6
13.2
10.6
12.2
11.4
1.6
10.3
6.3
13.0
16.7
n.a
12.1
3.2
6.2
16.0
15.6
n.a
13.3
17.0
6.2
8.1
15.4
8.5
8.5
12.0
9.0
5.5
5.1
6.6
2.3
13.7
2.8
Vacancy Rate (%)
Q4 2013
Q4 2012
17.6
14.0
17.1
9.5
5.4
13.9
14.5
10.5
14.5
18.4
6.5
8.3
7.2
18.2
10.6
12.4
12.0
1.9
10.4
6.2
12.5
9.0
n.a
13.2
5.2
5.9
15.3
16.0
n.a
12.3
12.8
6.4
8.1
13.0
7.5
7.6
9.1
8.9
5.5
5.0
6.6
6.2
11.7
2.7
18.0
18.0
15.8
14.7
5.6
15.1
12.0
10.7
14.5
21.0
6.6
7.5
7.5
20.1
11.3
13.1
12.5
1.2
11.3
6.5
12.2
8.3
n.a
12.4
5.5
6.0
15.1
16.2
n.a
11.2
10.5
6.8
7.9
11.9
9.7
6.5
6.4
9.0
7.0
5.3
6.5
10.8
8.8
1.8
Prime Rent (€/m2/year)
Q4 2014
Q4 2013
Q4 2012
365
216
222
198
276
409
186
265
216
192
1,603
750
252
484
312
387
456
689
389
300
355
384
220
228
480
280
318
436
265
480
550
414
582
234
168
400
400
502
210
206
309
180
276
805
350
168
210
168
264
389
186
265
216
192
1,487
750
258
377
330
402
456
746
369
300
345
384
220
222
480
315
288
409
260
490
613
402
391
246
152
400
439
486
204
210
306
177
300
814
345
180
216
168
264
375
186
265
216
192
1,364
830
258
325
312
402
432
797
369
288
338
359
200
216
480
285
288
409
270
510
571
396
407
252
144
410
395
486
200
209
300
168
300
814
Central Paris
Berlin
Moscow
1,200
1,000
800
600
400
200
BNP Paribas Real Estate Research
10
11
Q4 2013
12
13
000 m2
Q4 2014
Belgrade
09
Edinburgh
440
14%
420
12%
400
10%
380
8%
360
6%
340
4%
320
2%
2013
2,000
20%
1,800
18%
1,600
16%
1,400
14%
1,200
12%
1,000
10%
800
8%
600
6%
400
4%
200
2%
BNP Paribas Real Estate Research
Average prime rent
Birmingham
08
Oslo
07
Glasgow
06
Rome
05
Marseille
14
Lisbon
€/m2/year
Toulouse
0
0%
Lille
2%
Bratislava
4
Prague
4%
Saint Petersburg
8
Manchester
6%
Luxembourg
12
Barcelona
Total employment growth**
Amsterdam
8%
BNP Paribas Real Estate Research
16
Bucharest
Cologne
Lyon
Dublin
13
Vienna
12
Budapest
11
Milan
10
Madrid
Take-up*
Düsseldorf
09
Warsaw
Frankfurt
08
Brussels
07
Hamburg
06
Munich
05
Central London
million m²
BNP Paribas Real Estate Research
€/m2/year
Central London
Zurich
Central Paris
Geneva
Oslo
Moscow
Stockholm
Dublin
Luxembourg
Milan
Frankfurt
Manchester
Munich
Birmingham
Rome
Saint Petersburg
Glasgow
Edinburgh
Istanbul
Amsterdam
Helsinki
Madrid
Düsseldorf
Vienna
Hamburg
Lyon
Berlin
Warsaw
Brussels
Marseille
Cologne
Prague
Lisbon
Barcelona
Lille
Bucharest
Athens
Tallinn
Toulouse
Belgrade
Budapest
Bratislava
Vilnius
Riga
European office demand
European office prime rent and vacancy (43 cities)
Average vacancy rate
14
*35 cities - **27 European countries Source : Datastream, BNP Paribas
Take-up volumes
2,000
2014
1,800
1,600
1,400
Prime rents and vacancy rates
Vacancy rate
5
Investment Market
New post crisis record in the investment market
The commercial real estate investment volume in the 38 markets
monitored in this report amounted to €108 billion (€74 billion for
offices) making 2014 the best year since 2007. This represented
a significant increase of 16% (20% for offices) compared to an
already good year in 2013.
2014 was largely characterised by rising cross-border investment
and a progressive but continuous decline in risk aversion. The
global strength of real estate investment in the European markets
is still concentrated in core and liquid assets even though more
value-added and speculative deals were recorded.
2014 witnessed the recovery of the markets hardest hit by the
crisis. With +122% and +278% growth recorded between 2013 and
2014, Dublin and Madrid are the best examples of resurgence.
Few European countries still suffer from economic and political
uncertainties. Central London little changed from 2013 and
achieved the best volume in Europe with almost €30 billion
invested.
The pursuit of economic recovery will support all European
markets. Moreover, the ECB announcement of a €1.1 trillion
quantitative easing program will have a significant impact
on property markets. By maintaining low bond yields, QE will
assert the attractiveness of real estate. Thus, we will see further
investor interest in good quality assets with long-term leases to
high calibre tenants, pushing prime yields even lower in 2015.
Total investment volume (€ million)
2014
2013
2012
Amsterdam
Athens
Barcelona
Belgrade
Berlin
Birmingham
Bratislava
Brussels
Bucharest
Budapest
Central London
Central Paris
Cologne
Dublin
Düsseldorf
Edinburgh
Frankfurt
Geneva
Glasgow
Hamburg
Helsinki*
Istanbul
Lille
Lisbon
Luxembourg
Lyon
Madrid
Manchester
Marseille
Milan
Moscow
Munich
Oslo*
Prague
Riga
Rome
Saint Petersburg
Stockholm
Tallinn
The Hague
Toulouse
Vienna
Vilnius
Warsaw
Zurich
2,148
n.a
1,327
49
4,276
1,068
435
1,790
574
430
29,265
16,834
1,335
3,590
2,161
627
5,318
364
980
3,824
3,536
1,008
242
317
837
856
3,692
1,712
548
1,229
3,125
5,347
8,148
1,990
130
717
278
7,454
85
374
424
2,045
178
1,278
n.a
1,546
n.a
1,216
0
3,589
980
125
1,136
242
280
30,840
12,437
1,083
1,614
2,078
325
3,893
687
640
2,674
2,380
720
227
280
629
905
976
1,042
269
1,354
7,135
4,740
4,738
1,300
172
1,107
689
4,267
86
368
248
1,030
126
1,107
n.a
1,008
n.a
391
30
3,848
586
25
584
127
100
19,560
12,301
565
493
832
288
3,230
662
395
2,164
2,070
360
294
115
318
873
595
531
188
469
7,040
3,624
5,884
610
15
637
504
5,141
129
241
99
1,165
30
773
n.a
*Data for the country - Note: Conversion rates as at 31st of December 2014
Office investment volume (€ million)
2014
2013
2012
1,462
n.a
993
0
1,720
614
65
1,539
153
200
25,286
13,119
720
1,062
1,296
309
3,692
203
214
2,239
894
477
177
211
808
573
1,211
1,112
313
904
1,250
2,999
4,701
600
41
268
65
5,696
39
160
194
1,495
128
1,129
n.a
1,007
n.a
375
0
1,621
361
75
978
221
190
26,077
9,540
453
764
1,236
239
2,557
394
158
1,454
923
260
142
227
490
655
299
518
17
795
3,377
2,899
2,856
610
30
562
140
2,586
18
241
73
435
92
451
n.a
616
n.a
230
0
1,881
229
22
342
60
33
17,047
9,213
256
341
618
34
2,209
462
225
1,128
1,278
171
223
69
206
523
441
154
71
321
2,816
2,791
2,245
385
9
202
58
2,751
41
107
65
490
5
633
n.a
Net office prime yield (%)
2014
2013
2012
5.45
8.75
5.50
9.00
4.45
5.25
7.15
5.00
8.00
7.75
3.50
4.00
4.80
4.75
4.70
5.25
4.50
3.30
5.25
4.40
4.70
6.75
5.60
6.25
4.60
5.30
5.00
5.25
6.10
5.40
10.50
4.25
4.75
6.00
7.25
5.80
11.00
4.45
7.00
6.40
6.00
4.70
7.00
6.15
2.90
5.55
10.00
6.50
9.50
4.70
5.75
7.25
5.00
8.25
7.75
3.75
4.50
4.85
6.25
4.75
5.75
4.65
3.20
5.75
4.65
5.20
7.25
5.70
7.50
5.10
5.70
6.00
5.75
6.10
5.75
10.00
4.40
5.00
6.25
7.75
6.25
10.00
4.50
7.25
6.30
6.20
4.90
7.50
6.00
2.80
5.70
9.00
6.00
9.50
4.80
6.50
7.25
5.00
8.25
7.75
4.00
4.50
5.20
7.00
4.90
6.50
4.75
3.30
6.50
4.70
5.20
7.00
6.00
7.75
5.25
6.10
5.90
6.50
6.10
5.60
9.00
4.60
5.25
6.50
8.75
6.10
10.50
4.50
8.25
6.30
6.20
5.10
8.50
6.25
3.20
Zurich
Geneva
Central London
Central Paris
Munich
Hamburg
Berlin
Stockholm
Frankfurt
Luxembourg
Düsseldorf
Helsinki
Vienna
Dublin
Oslo
Cologne
Brussels
Madrid
Birmingham
Edinburgh
Glasgow
Manchester
Lyon
Milan
Amsterdam
Barcelona
Lille
Rome
Prague
Toulouse
Marseille
Warsaw
Lisbon
The Hague
Istanbul
Tallinn
Vilnius
Bratislava
Riga
Budapest
Bucharest
Athens
Moscow
Saint Petersburg
8%
6%
4%
BNP Paribas Real Estate Research
Vienna
60
40
20
12
13
0,0
14
€ billion
€ billion
30
3,5
24
2,8
18
2,1
12
1,4
6
0,7
BNP Paribas Real Estate Research
80
BNP Paribas Real Estate Research
140
100
6.0%
5.5%
BNP Paribas Real Estate Research
Real Estate investment
Düsseldorf
Moscow
Madrid
Warsaw
Manchester
Dublin
Barcelona
Milan
Luxembourg
Cologne
Birmingham
Prague
Lyon
Istanbul
Marseille
Edinburgh
Rome
Glasgow
Lisbon
Geneva
Budapest
Toulouse
Lille
Bucharest
Vilnius
Saint Petersburg
Bratislava
Riga
Tallinn
11
Amsterdam
10
Brussels
09
Berlin
€ billion
Hamburg
08
Munich
07
Frankfurt
Stockholm
06
Central Paris
Central London
European real estate investment volume (38 cities)
Office investment
Average European prime yield (44 cities)
7.0%
120
6.5%
06
07
08
09
10
11
12
13
14
Office investment volumes
2013
2013
2014
Net office prime yield
2014
12%
10%
7
Amsterdam
Little impact on office take-up from economic
recovery
Take-up - Employment
Economic sentiment in the Netherlands improved noticeably
over the year. After two years of contraction, the economy
will grow by 0.8% in 2014. Prospects are positive, as
growth is expected to pick up further to 1.2% in 2015 and
1.5% in 2016. The labour market improved slightly with
the unemployment rate expected to decline to 6.75% in
2015, although still high by Dutch standards. Office takeup will remain weak in upcoming years. In 2014 total takeup reached 230,000 m², 3% down on 2013. Service sector
companies are still optimizing their real estate portfolios.
The vast majority of office transactions are replacements,
resulting in lower net absorption figures.
400
4%
300
3%
200
2%
100
1%
0
0%
Office take-up
Employment growth (services)*
BNP Paribas Real Estate Research
000 m2
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for the Netherlands
Low grade A supply is seeing development go
forward
Prime rent - Vacancy rate
Due to modest office take-up performance, the overall
vacancy rate stayed high at 17.3%. Improvements in market
conditions were seen in the CBD (ZuidAs). In this district,
strong demand translated into a 5% rise in the prime rent
to €365/m²/year, which is expected to go up again in 2015.
The market still suffered from a lack of high quality supply
in prime locations, enabling new office development to go
forward in the main business district. Several secondary
locations benefit from the fierce competition in the central
areas. This will help push up rents in secondary markets
in 2015, allowing owners to undertake renovation of their
existing stock to meet occupier demand. Obsolete properties
in unattractive locations are likely to have no future office
use. The government actively stimulates the withdrawal
of this office space from the market through incentives for
redevelopment to other uses.
400
24%
350
20%
300
16%
250
12%
The upturn of the economy greatly improved the willingness
to invest in the real estate market. Office investment totalled
€1.5 billion, representing 70% of the total investment volume
in Amsterdam (€2.1 billion). Foreign investors were the main
source of buyers in their global search for secure assets with
good yields. Amongst them, German institutional investors
targeted prime assets especially in Amsterdam, supporting
new office development that is mostly pre-let. Conversely,
UK and US investors focused on non-performing properties
and loan portfolios which are being sold at significant
discounts. The strengthening activity triggered a decline in
prime yields of 35 basis points to reach 5.45% at the end of
2014. This trend should continue for prime assets. However,
the lack of prime products will push investors to look at
value-added properties.
Office vacancy rate
BNP Paribas Real Estate Research
Office prime rent
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
2,500
7.0%
2,000
6.5%
1,500
6.0%
1,000
5.5%
500
5.0%
02 03 04 05 06 07 08 09 10 11 12 13 14
BNP Paribas Real Estate Research
Foreign investors dominate investment market
€/m2/year
Athens
Despite the increased volatility, key macroeconomic
indicators in Greece have stabilised or turned positive for
the first time since 2008. Economic activity expanded by
0.8% in 2014 and the rate of decline in employment has been
slowing since 2012. The economy is expected to continue
to stabilise in the near term. Although confidence has been
improving, uncertainties surrounding the outcome of the
ongoing negotiations with the country’s creditors remain the
biggest threat to the economic recovery.
Employment
Employment growth (services)*
8%
6%
4%
2%
BNP Paribas Real Estate Research
Key economic indicators are stabilising
0%
-2%
-4%
-6%
-8%
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Greece
The signs of improvement in the Greek economy are gradually
being expressed in the real estate market. After 5 years
of decline, rents in the CBD and in most traditional office
location in Athens started to improve in 2014. The market
witnessed several relocations of large companies to bigger
and better space. Tenants with bargaining power have been
able to take advantage of grade A quality accommodation at
lower rents. Polarization is evident in the market as the stock
of ageing buildings continues to rise. The vacancy rates for
grade C and D units range between 20% to 30% whilst grade
B units stand between 5% to 10% and grade A between 3%
to 6% as demand for good quality buildings is predominant.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
500
25%
400
20%
300
15%
200
10%
100
5%
BNP Paribas Real Estate Research
Improvement is supporting rents
01 02 03 04 05 06 07 08 09 10 11 12 13 14
The notable drop in real estate prices in the last 6 years
enabled a number of transactions in 2014. These contributed
to cessation in the increase of prime yields.
Yield
Office prime yield
11%
10%
9%
8%
BNP Paribas Real Estate Research
High yields and low investment volumes
7%
6%
5%
04
05
06
07
08
09
10
11
12
13
14
9
Barcelona
Around 300 new lease contracts were closed for offices
in Barcelona during 2014, a remarkable figure which
comfortably exceeds the record of 282 deals signed in 2007.
In terms of floor space, take-up amounted to 233,700 m2,
representing an improvement of 35% on 2013. This data
together with lower levels of vacancy shows that the office
market in the Catalonian capital turned a corner in 2014.
The main drivers for companies changing offices during
2014 continued to be relocation and consolidation, although
expansions grew in importance towards the close of year.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
500
10%
400
8%
300
6%
200
4%
100
2%
0
0%
-2%
-100
BNP Paribas Real Estate Research
A major improvement in office take-up
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Spain
Greater activity on the demand side and a speculative
new-build market that remains inactive had an impact
on availability in the market. Barcelona closed 2014 with
91,000 m2 less vacant floor space than 2013, pushing
the vacancy rate down to 15.4%. Although the figures are
somewhat modest, the trend is heartening: this percentage
figure has fallen for five consecutive quarters. It has also
led to positive performance in rents. In average terms,
rental values in the CBD stood at €194/m²/year at the
close of year. This level is distancing itself from the trough
(€181/m²/year) seen in 2013 and will strengthen during
2015. The prime rent (€222/m²/year) rose for the first time
in five years during the second quarter of 2014.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
350
20%
300
16%
250
12%
200
8%
150
4%
BNP Paribas Real Estate Research
Prime rent rises for the first time in five years
01 02 03 04 05 06 07 08 09 10 11 12 13 14
With a total volume of €7 billion in 2014, Spain recorded
its second-best real estate investment level since 2007, the
peak of the previous economic real estate cycle. In Barcelona,
active acquisitions and capital markets are a consequence
of an improvement in investor sentiment towards Spain.
The commercial real estate investment volume reached
€1.3 billion in 2014, 9% up on 2013. Nevertheless office
investment turnover surged to €1 billion (+165% compared to
2013). The increased interest from investors led to a strong
compression of net office prime yields. They decreased to
5.5% compared to 6.5% 12 months ago.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
2,400
7.0%
2,000
6.5%
1,600
6.0%
1,200
5.5%
800
5.0%
400
4.5%
01 02 03 04 05 06 07 08 09 10 11 12 13 14
BNP Paribas Real Estate Research
Second best year for the office investment market
Belgrade
Net take-up reached nearly 54,000 m² with a further
9,000 m² accounted for by leases renewals. Take-up
increased significantly in 2014 compared to last year
reflecting job creation over the past two years. Traditionally,
most of the activity occurred within New Belgrade CBD zone.
Most occupiers have been seeking smaller units of up to
500 m², although several transactions exceeded 1,000 m².
Strongest demand by business sector came from IT, followed
by the public and consumer goods sectors.
Take-up - Employment
000 m2
Office take-up
Employment growth*
100
10.0%
75
7.5%
50
5.0%
25
2.5%
0
0.0%
-25
-2.5%
-50
-5.0%
-75
-7.5%
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Job growth is resulting in expansion of take-up
14
*Datastream / Serbian Statistical office - Data for Serbia
Office prime rent
€/m2/year
25%
250
20%
200
15%
150
10%
100
5%
05
Belgrade office market is beginning to create interest
After the European commission in Brussels decided to
launch negotiations on EU membership with Serbia in
March 2012, the first inter-governmental conference was
held in January 2014. This EU approach was a positive signal
for foreign investors, who started several office projects in
the Belgrade market in the CBD. This is favourable for further
development.
Office vacancy rate
300
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
The limited office space in the Belgrade market and the
increasing demand from tenants caused a large drop in total
vacancy rate from previous years. With only two buildings
delivered in 2012 and one small scale office building in
2014, vacancy rates dropped as new companies entered
and existing tenants expanded within the Belgrade market.
Rental levels increased significantly in the New Belgrade
CBD zone due to no development of Grade A and B office
buildings and the subsequent lack of new supply. As a
result, the market has become landlord driven and potential
tenants are forced to accept landlord terms. It is expected
that rental levels of Grade A and B office buildings will follow
a similar trend during 2015.
Prime rent
14
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
300
13%
250
12%
200
11%
150
10%
100
9%
50
8%
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
The lack of new supply is pushing rents up
14
11
Berlin
At 609,000 m², take-up in the Berlin office market set a new
record in 2014, exceeding the long-term average of around
19% and bettering the 2013 figure by more than one third.
No other major German city matched such a performance in
2014. This result gives the German capital first place in the
national ranking, ahead of the traditionally strong Bavarian
capital, Munich (597,000 m²). The increase in take-up
volume was not only due to the revival of the deal segment
over 10,000 m² but above all to a more buoyant demand
across all size bands. Furthermore, almost all the Berlin
submarkets stepped up their turnover compared with the
year before.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
750
2.5%
600
2.0%
450
1.5%
300
1.0%
150
0.5%
0
0.0%
BNP Paribas Real Estate Research
A record result in take-up volume
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Germany
In the course of the year, the lively demand led to a further
fall in vacancy, dropping below the 5% mark by Q4 2014
(4.7%) for the first time in well over ten years. The total
volume of vacant office space now stands at 888,000 m²,
13% lower than at the same time last year. The volume of
modern unoccupied premises was actually cut by 32% and
now represents less than one quarter of total vacancy – an
extremely low level. The combination of buoyant demand,
sustained low level of construction activity and falling
vacancy led to a steady increase in the prime rent throughout
the year. At the end of the fourth quarter it reached
€276/m²/year.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
400
10%
350
8%
300
6%
250
4%
BNP Paribas Real Estate Research
The vacancy rate fell below the 5% threshold
01 02 03 04 05 06 07 08 09 10 11 12 13 14
With an investment volume in 2014 of close to €4.3 billion,
Berlin registered its best result since the boom year of 2007.
This performance bettered the 2013 figure by 19% and the
ten-year average by 27%. This strong result was achieved
with comparatively few large deals in the triple-digit million
range. In fact, only 7 sales were posted in this size segment
and 3 of them were portfolio transactions included on a pro
rata basis. All the other size bands together generated more
than 150 deals, underlining the broad basis of demand.
Offices represented 40% of the total investment volume
versus 45% in 2013. The buoyant demand coupled with
limited supply has intensified competition among investors,
especially in the core segment. Thus, the prime yield for
office buildings has slipped further to 4.45%.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
8,000
6.0%
6,000
5.5%
4,000
5.0%
2,000
4.5%
01 02 03 04 05 06 07 08 09 10 11 12 13 14
BNP Paribas Real Estate Research
A very strong performance of the investment activity
Birmingham
Take-up rebounded to over 66,000 m² for the first time
since 2008. This strong result was helped by the largest
deal of the year completing in the final quarter: HS2 taking
9,100 m² across the 3rd to 6th floors for 15 years within the
Two Snowhill scheme in December. Other key deals over
the year included Vodafone for 2,100 m² at Colmore Plaza,
HSBC Private Bank on 3,400 m² at 120 Edmund Street and
DAC Beachcroft at 9 Brindleyplace for 3,000 m². These
transactions show occupiers’ renewed confidence within the
Birmingham market. Solid GDP and employment forecasts
bode well for 2015, therefore occupational levels should be
in line with the historic average.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
90
3%
60
2%
30
1%
0
0%
-1%
-30
BNP Paribas Real Estate Research
Renewed confidence in the occupier market
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for the UK
Prime rents have edged up throughout 2014 to stand at
£323/m²/year (€409) established at Two Snowhill in the
CBD. Supply fell over 20% during 2014 with a raft of office
to residential conversions. These change of use schemes
combined with increased occupier demand, led to a
significant fall in office vacancy levels. The supply imbalance
is set to continue with a dearth of Grade A space currently
on the market and no new developments are set to come
on-line until late 2015 at the earliest, when Brockton capital
should complete circa 5,000 m² at the MailBox. Schemes with
10,000 m² + floorplates required by professional occupiers
will not be completed until late 2016 at the earliest.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
450
18%
400
15%
350
12%
300
9%
250
6%
BNP Paribas Real Estate Research
Sharp reduction in vacant space
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Investment into the Birmingham office market rebounded in
2014 with volumes touching £481 million (€610 million) by
the end of the year, which was the strongest year for volumes
since 2007. Like many of the UK’s regional office markets,
Birmingham was targeted mainly by the UK institutions,
who accounted for £325 million (€412 million) of purchases,
approximately 68% of the total volume transacted. The
biggest deal of the year was M&G Real Estate’s purchase
of Two Snowhill for £140 million (€177 million) at 5.8% net
initial yield. The prime yield continued to move downwards
throughout the year to stand at 5.3% by the end of 2014.
The investment market should remain buoyant in 2015 with
further yield compression expected.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
2,000
8%
1,500
7%
1,000
6%
500
5%
BNP Paribas Real Estate Research
Surge in office investment volume
01 02 03 04 05 06 07 08 09 10 11 12 13 14
13
Bratislava
The Bratislava office market enjoyed particularly strong
activity during the second and the fourth quarters of 2014,
resulting in net office take-up almost doubling and topping
the last 10 years’ performance. This surge was mainly
due to several large transactions such as the 17,000 m² in
the Westend Gate pre-let to IBM or the 19,000 m² taken
by Johnson Controls. Market activity mostly involved
international companies, mainly from the finance and
banking sector, followed by the IT sector. The total office
stock reached 1.5 million m², of which 60% is classified as
grade A. One of the biggest projects completed in 2014 was
the Westend Gate building offering 35,000 m² of office space.
By the end of 2015, the first phase of Twin City should be
finalised, adding further 16,000 m² to the market.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
200
4%
150
3%
100
2%
50
1%
0
0%
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Large scale deals boosted take-up
14
*Oxford Economics - Data for Slovakia
€/m2/year
Office prime rent
15%
200
12%
150
9%
100
6%
03
Investment activity at its strongest since 2006
Activity in the Slovak investment market is at its strongest
since 2006. Investors targeted the capital, focusing on prime
properties, searching for a top quality building with good
location, long lease terms and strong tenant covenant. Offices
and mixed-use buildings were the leading sectors whereas
outside the Bratislava investment market was driven by
retail and industrial properties. The largest investment
transaction in 2014 in Slovakia was the acquisition of the
Eurovea retail and office property in Bratislava. The prime
initial yield is currently at 7.15%, having slightly dropped
since the end of 2013. The initial yield ranged between
8.50 and 9.00% in well-leased secondary properties in good
locations.
Office vacancy rate
250
04
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Prime rents in Bratislava were unchanged at €186/m²/year
despite increase in letting activity. In secondary locations
the average rents range from €120 to €156/m²/year. In 2015
effective rents will be lower, as landlords grant attractive
incentive packages. The vacancy rate decreased slightly
to 13.8%. It is expected to increase in 2015 with release of
second hand offices resulting from relocations to the newly
supplied modern offices.
Prime rent - Vacancy rate
14
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
800
8.5%
600
7.5%
400
6.5%
200
5.5%
06
07
08
09
10
11
12
13
14
BNP Paribas Real Estate Research
Prime rents are unchanged even with better
occupancy
Brussels
2014 was marked by an impressive bounce back in takeup volume. In 2014, some 437,300 m² were let or sold in
the Brussels office market, corresponding to a 39% increase
compared to 2013 and standing 5% above the 5-year
average. Take-up activity in 2014 saw the return of the
public sector to the spotlight, which accounted for 44% of
the take-up with a total transacted volume of 192,300 m².
The largest deal was the lease agreement signed by the
Flemish government on 50,000 m² in the "Meander" project
on the Tour & Taxis site. In an uncertain economic climate,
the activity emanating from corporates remained primarily
driven by cost issues, with virtually no demand based on
expansion. Totalling 245,000 m², the office demand of the
private sector remained 7% below the 5-year average.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
750
2.5%
600
2.0%
450
1.5%
300
1.0%
150
0.5%
BNP Paribas Real Estate Research
Take-up underpinned by public sector demand
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Belgium
Investment activity was boosted by large deals
With €1.5 billion invested in 2014, the office investment
market in Brussels continued to perform extremely well.
Thanks to big-ticket deals, the investment volume recorded
the strongest activity since 2007. The 2 main transactions of
the year included the sale of North Galaxy for €475 million
and the acquisition of Covent Garden. Considering the
persistent supply tension in the "Core" market due to
limited supply, some British players and US funds are taking
advantage of "Core+" or "added value" asset sales to make
their entrance onto the Brussels market. The abundance of
capital to invest in real estate and the shortage of products
caused a contraction of 25 bps in prime yields for 3/6/9year leases since 2013, standing at around 6.00% at the end
of 2014. The prime yield for assets with long-term leases
continues to fluctuate at around 5.00%.
€/m2/year
Office prime rent
Office vacancy rate
350
14%
300
12%
250
10%
200
8%
150
6%
BNP Paribas Real Estate Research
At the end of 2014, the vacancy rate in Brussels was at
10.3%, slightly down on the previous year. It reflects a supply
of 1.36 million m² with 63% outside of the CBD. The level of
quality supply continued to fall due to the small number of
speculative projects delivered onto the market. This trend
should continue in the quarters ahead, given the developers’
cautiousness and the lack of financing to launch speculative
schemes. At the same time, the market is still suffering
from tenants’ strategy of reducing their office space, thus
increasing availability of second hand premises. As a result,
the polarisation of supply is not set to reverse for some
months. Headline rents remained stable overall in the
Brussels office market. The office prime rent in the Leopold
District is stable at €265/m²/year, whereas the average
rent decreased to €157/m²/year due to the deterioration of
supply quality.
Prime rent - Vacancy rate
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
2,500
6.0%
2,000
5.5%
1,500
5.0%
1,000
4.5%
500
4.0%
BNP Paribas Real Estate Research
Slight reduction in vacant space
01 02 03 04 05 06 07 08 09 10 11 12 13 14
15
Bucharest
The leasing activity increased by 34% in 2014 compared
to 2013 reaching 233,800 m² of office space, excluding
renewals and re-negotiations. Office transactions have been
concentrated in the northern part of Bucharest, representing
66% of the total take-up. The geographic pattern of
transactions mirrors the concentration of office development
activity as almost 50% of newly completed offices in 2014
were located in this same northern submarket. The major
contributor to performance was the IT&C industry that
generated around 40% of the total take-up. Large tenants
had to consider pre-lease of office premises as the existing
stock did not provide sufficient good quality vacant space. As
a consequence, pre-lets accounted for approximately 20% of
the total take-up in 2014.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
500
15%
400
12%
300
9%
200
6%
100
3%
0
0%
BNP Paribas Real Estate Research
Office take-up on the rise in 2014
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Romania
The vacancy rate declined to around 13% thanks to take-up
absorbing space faster than the volume of office completions
being delivered. However this downward trend was also
counterbalanced by the significant share of relocations, a
main driving force of demand that generated further vacant
space. Take-up included pre-lets as well, which do not affect
the vacancy rate of the existing stock. Consequently, the
prime rent still remained stable for the fourth consecutive
year at around €216/m²/year. On the one hand, the
completed developments and proposed schemes that were
already pre-let have lessened the pressure on prices. On the
other hand, the upward pressure on rents, specifically for
prime offices, is getting stronger.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
300
25%
250
20%
200
15%
150
10%
100
5%
BNP Paribas Real Estate Research
Equilibrium between demand and supply sees still
no change to rents
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Driven by improvement in occupier market fundamentals,
the prime office yield went down by 25 bp during the second
half of 2014, reaching 8.0% at the end of the year. Investor
interest is reflected by the significant increase of the total
investment volume during H2 2014 with each asset class
contributing to recovery. The most significant transactions
have been concluded by foreign investment funds that
consolidated portfolios acquired during previous years. The
local market is benefitting from the availability of foreign
financial resources. With higher returns, a favourable
economic context and the further sales of commercial
property, Bucharest has very good prospects for its
investment market during 2015.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
800
12%
600
10%
400
8%
200
6%
04
05
06
07
08
09
10
11
12
13
14
BNP Paribas Real Estate Research
Growing investor interest results in yield compression
Budapest
In 2014 office take-up rose to an outstanding 251,600 m²
and reached its highest figure over the past five years. This
represented a 32% increase compared to 2013. The market
was boosted by large deals: 15 lease agreements over
3,000 m² were recorded in 2014. The majority of the large
deals were pre-let agreements and therefore the proportion
of pre-lets significantly increased, reaching 13% of total
take-up. The public sector was the most active player of
the market, 16% of the annual take-up was acquired by
state-owned companies. This sector was followed by IT
and telecom companies as well as Business Service Centres
(BSC). Gross take-up including lease renewals grew by 25%
compared to the previous year, reaching 465,600 m².
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
300
12%
250
10%
200
8%
150
6%
100
4%
50
2%
0
0%
BNP Paribas Real Estate Research
Record high volume of office take-up
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Hungary
Office properties still in the main focus of investors
The investment market showed increased activity in 2014.
By the end of the year investment volumes rose by 54%
compared to 2013. In line with 2013, office properties were the
main focus of purchasers. Primary local property funds were
the most active players in the acquisition of office i.e. Green
House, Óbuda Gate, Vision Towers- North Tower, Dexagon. In
the largest office investment transaction recorded in 2014,
Eiffel Palace was bought by the National Bank of Hungary.
Investors favour core assets with long-term income,
properties with favourable price and the possibility of high
capital gain in the long term. Due to the improving economic
achievement of the country and attractive investment
yields, international investors’ interest also turned towards
Hungary. A number of investment transactions currently in
the pipeline are expected to be concluded in 2015.
€/m2/year
Office prime rent
Office vacancy rate
350
22%
300
20%
250
18%
200
16%
150
14%
BNP Paribas Real Estate Research
As anticipated, the vacancy rate for grade A and B offices
continued its downward trend in 2014. Although the vacancy
rate remained high, the lack of new supply and the record
volume of take-up helped to reduce the vacancy rate to
16.2%. Concerning second hand premises, the availability
of prime office space drastically reduced in the key office
submarkets (CBD, Central Pest, Central Buda, South Buda).
The volume of new supply remained low even though it
doubled compared to 2013. It is expected to stay flat in 2015
with only 30,500 m² currently in the pipeline. Rental values
varied according to the location and the quality of premises
but remained overall stable over the year. Due to the strong
leasing activity and the low volume of new supply, positive
rental growth is forecasted for 2015.
Prime rent - Vacancy rate
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
2,000
10%
1,600
9%
1,200
8%
800
7%
400
6%
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
The office market is running out of large prime
office space
14
17
Dublin
Real GDP in Ireland grew by 5.3% y/y in 2014 sustained by
a good level of exports and a robust domestic economy. It
enabled further acceleration in employment growth in the
service sector by the end of 2014. On the back of this very
favourable economic backdrop, office take-up in Dublin
showed a strong performance, improving by 26% compared
to 2013. Demand from the TMT sector supported this upturn
as it represented more than one third of the take-up. A set
of large transactions from "dot-com" companies boosted the
market, such as Facebook (11,741 m²), Yahoo (6,968 m²),
Amazon (6,503 m²), or Dropbox (5,017 m²). It is worth
noting that new tenants entering the Dublin office market
contributed a large share of the take-up.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
300
6%
200
4%
100
2%
0
0%
-2%
-100
BNP Paribas Real Estate Research
Ireland turns the corner into growth
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Ireland
Record investment sales
Investment in commercial real estate exceeded €4.5 billion
in Ireland, way above the peak in 2006. Irish REITs became
a dominant player in 2014 with over €1 billion invested.
The largest purchases were an office and retail portfolio for
€375 million by Green REIT and the Central Park Sandyford
office and residential scheme for €311 million by Green REIT
and Kennedy Wilson. UK and US investors are still present
to support the Irish market with some major deals in Dublin,
such as the Liffey Valley Shopping Centre bought by Hines
and HSBC. We expect 2015 to be another busy year whether
transactions are by way of loan sales or direct property
sales. There remains a significant volume of assets still
to be brought to the market from bank deleveraging. The
competition over prime properties is pushing yields down
below 5%.
€/m2/year
Office prime rent
Office vacancy rate
700
24
600
22
500
20
400
18
300
16
200
14
100
12
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
The reduction in vacant office space in Dublin has accelerated
since 2013 as no completion occurred over the last 2 years.
The vacancy rate was down to 13.2% at the end of Q4 2014,
comprising a large share of 1980’s and older generation
buildings. The shortage of good quality new space has led to
older buildings being refurbished and are filling up fast. The
re-emergence of office development is visible with projects
under construction, such as No. 1 Ballsbridge (15,600 m²),
St. Stephens Green (6,900 m²) or in Hatch Street (12,000 m²).
Lack of new supply and strong demand in the CBD drove the
prime rent upwards by 28% over 2014 to €488/m²/year and
there is still room to gain more ground in 2015. This level
should encourage new office development over the next
year. Rents also grew in suburban locations where occupier
demand increased.
Prime rent - Vacancy rate
14
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
4,000
8%
3,500
7%
3,000
6%
2,500
5%
2,000
4%
1,500
3%
1,000
2%
500
1%
07
08
09
10
11
12
13
14
BNP Paribas Real Estate Research
The strongest rental growth in Europe
Frankfurt
Although office take-up rose in the final quarter (136,000 m²),
Frankfurt produced a poor result for 2014 as a whole. The
figure for the overall market area was 411,000 m², 17% down
on 2013 and the worst performance in the past twenty
years. The drop in turnover was due both to the not exactly
easy economic framework and to the low proportion of
large deals. Transactions for premises larger than 5,000 m²
accounted for only 21% of total take-up against a longterm average of over 40% for this size band. One reason for
this downturn is the restricted supply of sizeable modern
premises, which discourage many would-be tenants from
moving. The central office market zones of the City Centre
accounted for more than 52% of aggregate turnover.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
800
2.0%
600
1.5%
400
1.0%
200
0.5%
0
0.0%
BNP Paribas Real Estate Research
Lack of large space limits letting activity
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Germany
The reduction in vacancy already apparent since 2009
continued in 2014 and in the market as a whole the vacancy
rate is 11.4%. At the end of the year, it stood at 1.8 million m²
(5% less than 12 months before) and included 44% of
modern premises. The largest amount of vacant space is
located in the Inner City office market, where modern space
actually accounts for 69 % of the unoccupied stock. This
was due to the completion of buildings like the Taunusturm.
The prime rent remained stable at €456/m²/year in 2014,
achieved in the submarket Bankenviertel. With a top rent of
€444/m²/year, the Westend district remains the second most
expensive precinct.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
700
16%
650
14%
600
12%
550
10%
500
8%
450
6%
400
4%
BNP Paribas Real Estate Research
Vacancy continues to shrink
01 02 03 04 05 06 07 08 09 10 11 12 13 14
With a transaction volume of around €5.3 billion, the
investment market registered its second-highest total of all
time. It exceeded the already very good 2013 result by 37%
and the ten-year average by 52%. The outstanding result
was fuelled by a very large number of deals. Furthermore a
whole series of large-volume transactions in the triple-digit
million euro range boosted the market. Altogether, there were
11 such deals, including the mixed-use Palais Quartier, the
Silberturm, the Trade Fair Tower and the Winx Tower project
development on the MainTor site, an off-sell acquisition. In
view of the tough competition among investors and the very
favourable financing environment, the office prime yield
slipped further down to 4.50%.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
8,000
6.0%
6,000
5.5%
4,000
5.0%
2,000
4.5%
BNP Paribas Real Estate Research
Second-best investment turnover ever
01 02 03 04 05 06 07 08 09 10 11 12 13 14
19
Geneva
Once again the letting market has been driven by deals for
units under 600 m²; there have been few transactions for
units over 1,000 m² due to low job creation. Companies, such
as Société Générale and Crédit Agricole, have been taking
advantage of favourable rental conditions to relocate and
regroup their staff in new or refurbished buildings. Such
premises thereby released have been occupied for many
years and are therefore ageing and in need of refurbishment.
Over the first nine months of the year 6,300 m² of offices
have been completed in the canton of Geneva. Although this
looks like a relatively low figure, there are 190,000 m² of
offices under construction, which in the coming years will
add to the already abundant supply.
Employment
000 m2
Employment growth (services)*
5%
4%
3%
BNP Paribas Real Estate Research
Low job creation leading to poor take-up
2%
1%
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Switzerland
According to OCSTAT – Office Cantonal de la Statistique, the
vacancy rate fell from 1.90% to 1.55% in 2014, representing
less than 70,000 m² of vacancy in the canton of Geneva.
Published decline in vacancy is in sharp contrast to the
reality on the ground. Indeed, market figures tend to indicate
that supply has increased by 10% to about 220,000 m²;
representing 5.4% of the existing stock. Supply still outstrips
demand and we see that the widespread slide in rents
that began in 2011 has continued. The prime rent is still
falling and now stands at CHF 830/m²/year (€689), a fall
of 17.4% since 2011. The average rent stands at CHF
537/m²/year (€446), having slipped by 4.4% in a year.
Occupiers are not only benefiting from lower rents, but also
substantial incentives such as staggered rents, rent-free
periods or contribution in fitting out costs for their premises.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate*
900
2.5%
800
2.0%
700
1.5%
600
1.0%
500
0.5%
04
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Prime rents under pressure
14
*OCSTAT - Office Cantonal de la Statistique
Investment in commercial real estate hit a historic low in
2014 at CHF 438 million (€364 million). Investment in offices
represented over CHF 247 million (€205 million), half of
the figure for 2013, a record year that saw four exceptional
office building sales. 2014 did not get the same boost with
only two office buildings sold in the city centre and eight
more in the suburbs. The prime yield edged up from 3.19%
to 3.3%. The figures for 2015 already suggest a sharp rise
in investment. The announcement in early January of a
transaction between two major Swiss players for offices on
Rue du Rhône for CHF 535 million (€444 million) and a yield
close to 3.5% already exceeds the total for the whole of 2014.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
1,000
5.0%
800
4.5%
600
4.0%
400
3.5%
200
3.0%
06
07
08
09
10
11
12
13
14
BNP Paribas Real Estate Research
Poor finish to 2014 but 2015 off to a flying start
Hamburg
Take-up in the Hamburg office market in 2014 totalled
513,000 m². This excellent result not only exceeded the
2013 figure by 17% but was also 7% higher than the ten-year
average. As with Berlin, Hamburg was the only key German
office location to significantly step up its performance yearon-year and even took third place at a national level in total
take-up volumes. It was fuelled by an exceptional number of
major deals upwards of 10,000 m², including a high owneroccupier proportion. The biggest contracts were concluded
by the Telekom in Centre North (32,200 m²) and the VBG
statutory accident insurance organisation in Barmbek
(22,000 m²).
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
600
3%
400
2%
200
1%
0
0%
BNP Paribas Real Estate Research
Major deals see an increase in turnover
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Germany
In the past twelve months, there has been hardly any
change in office vacancy; it stood at 853,000 m² at the end of
2014. The volume of modern empty premises – the segment
attracting the strongest demand –now accounts for only
24% of total vacancy, which represents a further relative
fall. The vacancy rate in the market as a whole is 6.3%. The
prime rent remained steady over the course of the year at
€300/m²/year and is obtained for high-grade premises in
very good parts of the City Centre. Although there have also
been modest falls in rental prices in some office market
zones, the overall trend is upwards in both top and average
rents.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
350
9%
300
8%
250
7%
200
6%
150
5%
BNP Paribas Real Estate Research
Vacant space volumes remain unchanged
01 02 03 04 05 06 07 08 09 10 11 12 13 14
In 2014, the investment market registered a transaction
volume of €3.8 billion and thus exceeded the very good 2013
total by 43%. The result was also 44% up on the ten-year
average and almost reached the level achieved in 2006. A very
lively end-of-year spurt generated more than €1.3 billion, the
third-highest quarterly performance ever recorded. Several
large deals upwards of €100 million together contributed
almost one billion euros to total investment. The volume
of investment produced just by single asset deals was by
far the biggest ever with €3.3 billion. The buoyant demand,
tough competition in the core segment combined with
favourable financing conditions, saw the net prime yield for
office buildings decline by 25 basis points over 2013 to stand
at 4.40%.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
6,000
6.0%
5,000
5.5%
4,000
5.0%
3,000
4.5%
2,000
4.0%
1,000
3.5%
BNP Paribas Real Estate Research
Very high investment volume
01 02 03 04 05 06 07 08 09 10 11 12 13 14
21
Helsinki
The Helsinki Metropolitan area is still facing challenges.
Sluggish trends in the office market have been reflecting
weak trends in service employment with little job creation in
2014. Large companies have been downsizing and subletting
their premises. At the same time, companies have been
looking for new premises with multi-activity office solutions
generating more efficient space usage. The effects of this
space efficiency have resulted in the release of vacant space.
Net absorption - Employment
000 m2
Office net absorption
Employment growth (services)*
180
3%
120
2%
60
1%
0
0%
-1%
-60
BNP Paribas Real Estate Research
Occupiers in search for space efficiency
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Finland
The combined effect of a slow economic cycle and the enduser preference to efficient space resulted in increased
vacancy rates. Slow office demand impacted on rental
growth even in the city centre. Although prime rents have
been increasing moderately, the rate of growth has been
slowing down during the past few years. The office market
is oversupplied and approximately 100,000 m² of new offices
is in the pipeline in the metropolitan area. This means that
the volume of vacant space will not decrease without a
significant economic recovery and office demand.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
400
16%
350
14%
300
12%
250
10%
200
8%
150
6%
100
4%
50
2%
BNP Paribas Real Estate Research
Helsinki metropolitan area is facing oversupply
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Until last year, investment demand in Finland was very
selective and focused on prime locations in the city centre
of Helsinki and on fully-rented new properties. There has
been a limited supply of low-risk properties. As a result
the focus has clearly started to spread out towards riskier
properties including properties with some vacancy or with
development opportunities. However, due to the weak
economic environment with lay-offs and decreased sales
volumes, the value increase is hindered by the negative
development of net proceeds. As properties are both an
investment tool and a resource for the user, reaching a
sustainable value increase through cash flow requires a
significant growth in the national economy.
Finland - Investment - Yield
€ million
Office investment
Other investment
Office prime yield
6,000
7%
5,000
6%
4,000
5%
3,000
4%
2,000
3%
1,000
2%
05
06
07
08
09
10
11
12
13
14
BNP Paribas Real Estate Research
Shift toward uncertainty
Istanbul
Turkish economic activity has been gaining momentum after
a weak second quarter, although the pick-up has not been
strong enough to push GDP growth significantly above 3%
in 2014. In 2015, the main drivers of growth will be the
government’s infrastructure investment and public-private
partnership (PPP) mega-projects, such as a third bridge over
the Bosphorus, a third airport in Istanbul and the highway
connecting Istanbul to Izmir.
Net absorption figures in 2014 reached a new record high,
exceeding 400,000 m². The market sectors most in demand
by national and multinational occupiers in 2014 were Levent
in CBD and Ataşehir on the Asian side.
Net absorption - Employment
000 m2
Office net absorption
Employment growth (services)*
700
7%
600
6%
500
5%
400
4%
300
3%
200
2%
100
1%
0
0%
BNP Paribas Real Estate Research
Record net absorption despite slower economic
conditions
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Turkey
A market dominated by national investors
Despite economic slowdown, national investor demand
dominated the office investment market in 2014. Gulf
investors have been back since the end of elections but stay
mostly focused on residential properties. Office investment
volume jumped to $600 million (€480 million), an increase of
40% compared to 2013. The major transaction was recorded
in the CBD, the Kristal Kule located on Buyukdere Avenue
for a total of $303 million (€240 million). Prime office yields
decreased to 6.75% in 2014.
€/m2/year
Office prime rent
Office vacancy rate
400
40%
300
30%
200
20%
100
10%
BNP Paribas Real Estate Research
At the end of 2014, the total stock of grade A offices
was standing at 4.6 million m2 in Istanbul, of which
1.9 million m2 was located in CBD. Supply was rather strong
this year with 760,000 m² of new offices completed during
2014. While some of the floorspace was pre-let, a large
amount was delivered on a speculative basis, pushing the
vacancy rate to a 9-year high of 16%. In Levent, 140,000 m2
of new offices were added increasing the vacancy rate in
this prime submarket to 11%. Developer activity continues
strongly, 1.3 million m² new office stock is expected to add
in the main business districts of Istanbul and total stock
should reach 5.9 million m² at the end of 2017. Prime rent
was $480/m²/year (€384) and average rent $280/m²/year
(€224) in Istanbul grade A office market in 2014. Rents are
anticipated to remain stable for prime locations in 2015.
Prime rent - Vacancy rate
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
1,200
8.0%
1,000
7.5%
800
7.0%
600
6.5%
400
6.0%
200
5.5%
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Strong increase in supply pushed up the vacancy rate
14
23
Lille
The take-up result remained well above the long-term
average, despite an uncertain economic background.
Nevertheless, the Lille office market slightly declined (-3%)
in 2014 to 165,800 m². Each main district was negatively
affected by the shortage of new supply, especially in Euralille
(-70%). Small-sized transactions supported the market in
2014 representing more than 40% of the transacted volumes.
Deals over 5,000 m² were exclusively owner-occupier
operations, such as "la Cité des Métiers et de l’Artisanat" in
Lille City Centre with 12,000 m², Boulanger with 9,000 m² in
the South Periphery and Eiffinov in the district of Eurasanté
with 8,300 m².
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
250
5%
200
4%
150
3%
100
2%
50
1%
0
0%
BNP Paribas Real Estate Research
Office take-up is in good condition
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for France
After three years of growth, vacant space dropped by 7%. For
second hand premises, supply decreased only by 3% and has
remained high over the last 3 years. New premises supply
saw a sharp fall with only 35,300 m² available (-69%),
which represents barely more than 15% of the vacant stock,
the lowest share in 10 years. Due to these tight market
conditions, rents were maintained at their previous levels
and the prime rent remained at €220/m²/year in Euralille.
The situation is likely to change in 2016 onwards for the Lille
metropolitan area, as a substantial amount of new office
space will be delivered into the market.
Prime rent - Vacant Space
€/m2/year
Office prime rent
Office vacant space
000 m2
250
300
200
250
150
200
100
150
50
100
BNP Paribas Real Estate Research
Vacancy reduction sees prime rent stay at a high
level
01 02 03 04 05 06 07 08 09 10 11 12 13 14
After a fall in 2013 mainly due to the lack of assets for
sale, the transaction volume in Lille increased in 2014
with €242 million invested. Offices accounted for 73% of
this total. Several significant deals were recorded in 2014,
such as the acquisition of Les Arcuriales building in Lille for
€44 million and the Opéra Faidherbe building by AEW
Europe for €17 million. Many investors are still looking
at Lille. It remains a favourite location amongst regional
cities along with Lyon thanks to the relative liquidity of the
market. Given the stiff competition for "core" assets, the
prime yield decreased to around 5.6% at the end of 2014.
This contraction in yield will continue further in 2015.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
300
8.0%
250
7.5%
200
7.0%
150
6.5%
100
6.0%
50
5.5%
01 02 03 04 05 06 07 08 09 10 11 12 13 14
BNP Paribas Real Estate Research
Healthy figures for the investment market
Lisbon
A significant improvement in the economy has had positive
impact on the office market in Lisbon. The employment rate
rose from negative values to 2.6% during 2014. This boosted
leasing activity and occupier motivation to relocate to newer
and more efficient buildings. Office take-up increased by
over 63% when compared to 2013, confirming the rise in
confidence levels. This stimulated demand for offices over
800 m² and large transactions over 3,000 m². Overall, the
annual number of office transactions grew from 186 to 239
in 2014.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
300
6%
200
4%
100
2%
0
0%
-2%
-100
BNP Paribas Real Estate Research
Improved economic climate benefited the office
market
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Portugal
The vacancy rate diminished at the end of 2014, down to
12.1% compared to 13.2% last year. This was mainly caused
by the reduction of new space available. This trend is
expected to continue throughout 2015 and 2016 helped by
the low volume of availability in new deliveries that have
been already pre-let at 50% at least. Some office buildings
have been converted into hotels or luxury houses in central
areas and are therefore taken out of supply. The lack of
office supply shifted rents up in the prime CBD. However,
this trend was not seen in the other Lisbon office areas,
where a general decrease in rents was recorded (with the
exception of zone 3). Considering the pressing demand for
new products and the lack of new supply, rents are expected
to slightly increase in 2015.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
300
14%
250
12%
200
10%
150
8%
BNP Paribas Real Estate Research
Decrease in the vacancy rate
01 02 03 04 05 06 07 08 09 10 11 12 13 14
The performance of the Portuguese investment market has
reinforced the climate of recovery that was felt in other
segments. In 2014, commercial real estate investment in
Lisbon reached €317 million, representing a 13% increase
compared to the previous year. This mainly attributed to a
rise in the retail sector. Office investment slightly decreased
when compared to the peak observed in 2013, but it stood
well above its 10-year average. The returning interest of
international investors, the growing number of buyers,
asset values and the improved market activity, generated
a significant compression in yields in the last year. In this
context, prime office yields recorded a contraction to 6.25%.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
400
9%
300
8%
200
7%
100
6%
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
The office investment market is healthy
14
25
Central London
Central London office take-up totalled 1.49 million m²,
24% up on 2013 and the highest level recorded since the
height of the dot-com boom in 2000. Against the backdrop
of continuing economic recovery, occupier sentiment
strengthened significantly. Increases in employment and
business investment helped facilitate the re-emergence
of large occupiers agreeing pre-let deals well in advance
of their move dates. The importance of TMT occupiers in
Central London continued with 24% of overall take-up,
whilst augmented by the revival of the finance sector that
accounted for 18% of take-up. Finally, it is worth noting the
growth of serviced office operators in the capital. The sector
made up less than 1% of the market in 2010 & 2011 but
surged to 7% of total take-up during 2014.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
1,600
4%
1,200
3%
800
2%
400
1%
0
0%
-1%
-400
BNP Paribas Real Estate Research
Exceptional occupier demand sees take-up hit a
high 2014
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for the UK
Further yield compression as appetite for assets
continues
Downward pressure on government bond yields, a surging
occupier market and a strong rental growth forecast has ensured
Central London remains a key target for investors. Large trophy
asset purchases by foreign buyers boosted Q4 2014 office
investment to more than £8.5 billion (€10 billion), breaking the
record set during the final quarter of 2013 and pushing the overall
2014 volume to £20 billion (€25.3 billion). Around 81% of Q4 office
investment involved foreign buyers, bringing the annual total to
73%. Volumes within the City office market were particularly
high at £8.2 billion (€10.4 billion). There were 24 deals of more
than £100 million, 21 of these involved cross-border capital. The
weight of money being deployed into the Central London office
market has pushed the prime City office yield down to 4%, whilst
the West End currently remains at 3.5%.
€/m2/year
Office prime rent
Office vacancy rate
1,800
16%
1,600
14%
1,400
12%
1,200
10%
1,000
8%
800
6%
BNP Paribas Real Estate Research
A combination of exceptional growth in take-up and a
constrained development pipeline resulted in a dramatic
decline in the availability of office space across Central
London markets. At 1.05 million m2 supply was 30% down
on the previous year, producing one of the lowest vacancy
rates on record at 5.1%. In particular the Midtown (4.8%),
Southbank (3.6%) and West End (3.6%) markets are all
experiencing an acute shortage of space with vacancy rates
firmly below 5% and further drops expected during 2015. The
Southbank office market has seen one of the largest drops
in vacancy, with a 379bps movement in the final quarter
alone. 2015 will see one of the lowest levels of development
completions on record, further exacerbating supply issues
and resulting in upwards pressure on rents as competition
for the remaining space intensifies.
Prime rent - Vacancy rate
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Investment - Yield
€ billion
Office investment
Other investment
Office prime yield
35
6.0%
30
5.5%
25
5.0%
20
4.5%
15
4.0%
10
3.5%
5
3.0%
01 02 03 04 05 06 07 08 09 10 11 12 13 14
BNP Paribas Real Estate Research
“Supply Crunch” to push rents higher
Luxembourg
Office take-up in Luxembourg ended the year with a buoyant
final quarter and recorded its highest level since 2008.
During Q4 2014 some 78,900 m² were let or sold, bringing
the annual result to 214,300 m², 43% up compared to 2013.
Consultancy and financial services represented around two
third of total take-up. In fact, the 2 largest transactions in
2014 were the occupancy by PWC of 27,000 m² into their
new building – Crystal Park – in Gasperich and the move of
KMPG into their new headquarter (17,000 m²) in Kirchberg.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
350
7%
300
6%
250
5%
200
4%
150
3%
100
2%
50
1%
BNP Paribas Real Estate Research
Robust take-up boosted by large deals
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Luxembourg
Thanks to strong leasing activity and few speculative
completions, the availability in the Luxembourg office
market is back to its historic low level. Over the course of
2014, availability declined sharply to reach to 107,000 m²
reflecting a vacancy rate of 3.2% vs 5.2% a year earlier.
The decrease masks variable supply conditions across the
different office markets and has not had any impact on
rental values yet. Prime office space continues to be trade
close to €480/m²/year in the CBD. Before seeing an upward
movement on rents, decreases in commercial incentives
granted by the owner will have to occur that will reduce the
gap between headline and effective rental values.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
600
8%
500
6%
400
4%
300
2%
BNP Paribas Real Estate Research
A significant shrinkage of availability
01 02 03 04 05 06 07 08 09 10 11 12 13 14
On the investment side, 2014 was also a record year with an
investment volume reaching €837 million - its highest result
since 2007. The office segment remained by far the favoured
asset segment for investors. The most notable transactions
achieved were the acquisition of Galerie Kons (20,500 m²) by
AXA for an investment volume close to €150 million and the
sale of Le Dôme by Prameca to Blackstone for an estimated
amount of €120 million. Following a first half year marked
by downward movement, the prime yield for 3/6/9-year
leases flattened by Q4 at 5.40%. For prime assets providing
a secure long-term cash flow or small lot sizes, the prime
yield stood well below 5%.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
2,800
7.0%
2,400
6.5%
2,000
6.0%
1,600
5.5%
1,200
5.0%
800
4.5%
400
4.0%
BNP Paribas Real Estate Research
The strongest investment volume since 2007
01 02 03 04 05 06 07 08 09 10 11 12 13 14
27
Lyon
After a buoyant year 2013, office take-up in Lyon kept up
the same pace in 2014 with 245,600 m² transacted (-4%),
above its 5-year average. As with 2013 some major deals
boosted the market, such as Caisse d’Epargne in the Incity
tower for 17,600 m², the turnkey lease for Sanofi in Gerland
for 15,500 m², and the owner-occupier deal of 10,600 m²
for Seb in Ecully, North West. Furthermore, demand stayed
buoyant in the medium and small size band, and the volume
of transactions below 1,000 m² increased by 3%. It is worth
noticing that for the first time, Gerland took the first position
amongst office districts in Lyon (58,000 m²), ahead of the
traditionally strong Part-Dieu (46,000 m²). This trend should
continue in 2015 with major transactions in the pipeline in
Gerland.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
300
6%
250
5%
200
4%
150
3%
100
2%
50
1%
0
0%
BNP Paribas Real Estate Research
A solid occupier market
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for France
The office vacancy rate stood at 6.2% in 2014. This is an
upswing following 3 years of decline and is due to a
significant rise of both new and second-hand supply. On the
one hand, new supply increased in central areas because of
office completions. On the other hand, office space released
into the market in the same districts fuelled the secondhand vacant stock. Average rents remained stable whereas
the prime rent dropped back to more standard levels at
€280/m²/year, after the historic peak recorded in 2013 in the
Part-Dieu district.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
350
8%
300
7%
250
6%
200
5%
150
4%
100
3%
BNP Paribas Real Estate Research
Vacancy rate slightly up after 3 years of decline
01 02 03 04 05 06 07 08 09 10 11 12 13 14
With €856 million invested in commercial real estate in
2014, the investment market in Lyon was stable compared
to 2013. Although offices were down 12% compared to the
same period in 2013, amounting to €573 million, this is still
high levels compared to the previous years. There have been
7 office deals over €25 million each since the beginning of
the year. One of the most notable included the off-plan
acquisition of the Incity tower by CERA in Lyon Part-Dieu.
The scarcity of secured assets to sell in Lyon CBD already
caused the prime yield to contract in 2014, which now
stands at 5.3%. Since 2014, investors have been looking at
new areas as Villeurbanne Carré de Soie or Gerland, where
they can find more attractive initial yields of over 6% for new
buildings.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
1,200
8.0%
1,000
7.5%
800
7.0%
600
6.5%
400
6.0%
200
5.5%
01 02 03 04 05 06 07 08 09 10 11 12 13 14
BNP Paribas Real Estate Research
The most active investment market amongst
France’s regional cities
Madrid
In terms of take-up, the Madrid office market in 2014 showed
a very similar picture to 2013, with 370,000 m² let. The
number of deals grew by 17% year-on-year, demonstrating
a more dynamic market although average volume per deal
was lower. The city centre remained attractive to companies
looking for office space as it has been since the beginning of
the crisis. The central zone of Madrid cornered 56% of office
transactions last year, a rise of 6 percentage points on 2013.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
10%
1,000
800
8%
600
6%
400
4%
200
2%
0
0%
-2%
-200
BNP Paribas Real Estate Research
Stable take-up despite the scarcity of large-scale
deals
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Spain
The pressure generated by demand translated into an
increase of 10% compared to 2013 for prime rents on the
Castellana-Recoletos thoroughfare and 11% for average
rents within the M-30 inner ring road. Prime rents reached
€312/m2/year at the end of 2014, whereas average rents
in the central zone stood at around €219/m2/year. Supply,
however, is another matter. The vacancy rate climbed from
15.2% in 2013 to 16.2% in 2014. An increase of one percentage
point was a consequence of the release of second-hand
space over the past year, mainly through consolidation
transactions. The rise occurred despite the scarce deliveries
of new space.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
500
18%
450
15%
400
12%
350
9%
300
6%
250
3%
BNP Paribas Real Estate Research
Office rents in Madrid rising for the first time since
2008
01 02 03 04 05 06 07 08 09 10 11 12 13 14
With a total volume of €7 billion in 2014, Spain recorded
its second-best real estate investment figures since the
2007 peak. In Madrid, the active acquisitions and capital
markets are a consequence of an improvement in investor
sentiment towards Spain. The investment volume in the
capital city reached €3.6 billion in 2014, 278% up on 2013
and even exceeding the record volumes seen in 2007.
Investor interest led to a strong compression of net prime
yields. They decreased to 5% for offices compared to 6% at
the end of 2013.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
4,800
6.5%
4,000
6.0%
3,200
5.5%
2,400
5.0%
1,600
4.5%
800
4.0%
BNP Paribas Real Estate Research
Record year for the investment market
01 02 03 04 05 06 07 08 09 10 11 12 13 14
29
Manchester
Manchester’s take-up in 2014 for both city centre and
out-of-town stood at circa 189,000 m², which was only 6%
lower than the record take-up witnessed in 2001 and 2007.
It represented an annual increase of 18% on 2013 and up
23% on the 5-year average of 153,300 m². Demand was
spread across the city centre in developments such as in
Spinningfields, Piccadilly and St Peters Square, and with
growth in the take-up of all unit sizes. Professional services
were the main driver for take-up and there was an increase of
new entrants into the market. Amongst them, TLT Solicitors
and Towergate Insurance in 3 Hardman Square whilst Trader
Media Group and Ford Capital selected Manchester for their
business expansion. The biggest transaction was Slater and
Gordon’s move to 58 Mosley Street fora 9,958 m² unit.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
250
2.5%
200
2.0%
150
1.5%
100
1.0%
50
0.5%
0
0.0%
-50
-0.5%
-100
-1.0%
BNP Paribas Real Estate Research
An overall improvement in the occupational office
market
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for the UK
€/m2/year
Office prime rent
Office vacancy rate
450
18%
400
15%
350
12%
300
9%
250
6%
200
3%
BNP Paribas Real Estate Research
Driven by strong occupier activity and an absence of any
significant completions over 2014, Grade A supply dwindled
further. This led to an increase in the office prime rent, which
stands now at £344/m²/year (€436) within the prime city
centre core. Meanwhile a lot of the vacant space is obsolete
and will be converted to other uses such as residential.
For good quality second hand premises, headline rents
can achieve circa £296/m²/year (€375). For all grades,
incentive packages are starting to reduce as choices become
more limited for occupiers. With the dearth of new supply,
occupiers are increasingly left with no other option but to
consider pre-let solutions and we expect to see rental growth
during 2015. With improving economic fundamentals, there
is the potential for speculative development to return to the
market.
Prime rent - Vacancy rate
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Manchester dominated the UK regional office
investment market
Investment - Yield
Manchester saw a record level of transactional volume
with £877 million (€1.1 billion) ploughed into the city’s
offices in 2014. The weight of money targeting Manchester
was underpinned by the combination of strong tenant
demand and the lack of supply; investors are anticipating
rental growth. Furthermore, Manchester was the strongest
performing regional office market, accounting for 42% of
the total office investment amongst the UK’s "Big 6" cities.
Investors, particularly the UK institutions such as M&G
Real Estate and NFU Mutual, were driven by the attractive
yield spread to London. Manchester prime yields are now
estimated to be in the region of 5% and reduced significantly
through 2014 as pressure on pricing intensified.
3,000
7.0%
2,500
6.5%
2,000
6.0%
1,500
5.5%
1,000
5.0%
500
4.5%
€ million
Office investment
Other investment
Office prime yield
01 02 03 04 05 06 07 08 09 10 11 12 13 14
BNP Paribas Real Estate Research
Shortage of good quality supply
Marseille
In 2014, take-up in Marseille showed a substantial rebound
and reached 126,400 m², which represented 20% growth.
This progression was mainly sustained by occupier activity
for new office premises that account for 48% of the total takeup. Pre-let transactions absorbed 23,820 m² of the 35,000 m²
of the tower "La Marseillaise" located in the growing
business district of Euroméditerranée, with 16,000 m² taken
by the Greater Marseille Authority alone. Take-up for second
hand premises remained subdued at 65,000 m². Marseille’s
central business district - Euroméditerranée - was the most
sought-after district of the city with more than 65% of the
take-up for new offices, confirming its attractiveness to
occupiers.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
200
4%
150
3%
100
2%
50
1%
0
0%
BNP Paribas Real Estate Research
New office space was the main source of demand
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for France
Supply jumped by 12% due to growth in second-hand
vacant space that represented 79% of the total available
office space. Supply for new premises reduced by 12%,
representing 54,700 m². Rental values rose particularly
for new premises located in the central area of Marseille,
where they now stand at €185/m²/year in average. The
prime rent reached €265/m²/year in Euroméditerranée and
most of the available new premises are actually located in
Marseille centre. Availability of new office premises will be
maintained by the important deliveries coming onto the
market in 2016-2017. These future completions include "Le
Virage" in Marseille South and the 3 buildings of "Astrolabe"
in Euroméditerranée.
Prime rent - Vacant Space
€/m2/year
Office prime rent
Office vacant space
000 m2
300
300
250
250
200
200
150
150
100
100
BNP Paribas Real Estate Research
Little rental growth in Marseille centre
01 02 03 04 05 06 07 08 09 10 11 12 13 14
2014 was an outstanding year for investment in commercial
real estate in Marseille, with €548 million invested over
2014 (+208% on 2013). This is the second best year ever
for investment after 2007. In terms of asset, investors
mainly opted for offices as these are the most liquid assets,
accounting for 57% of investment in Marseille. There were
two significant deals over €50 million in 2014, including the
off-plan acquisition by CDC and CEPAC of the new tower
La Marseillaise for €180 million and the Europrogramme
building by Primonial REIM for €51 million. In terms of yield,
the trend was flat overall.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
1,000
8%
750
7%
500
6%
250
5%
BNP Paribas Real Estate Research
An outstanding year for investment
01 02 03 04 05 06 07 08 09 10 11 12 13 14
31
Milan
Employment has been reducing over the last two years with
Italy experiencing a third recession since the 2008 crisis.
Take-up volume reduced in 2013 but bounced back in 2014
thanks to some large operations that resulted in companies
moving into more modern premises. This improvement in
occupier’ activity does not change the overall market trend.
It remains a substitution market with companies trying to
reduce their real estate costs. In the coming year, Italy will
face a period of 3 lows; low GDP growth, low employment
growth and low inflation. Thus the market’s driver will
remain large deals; tenants will catch an opportunity to
secure a new lease with lower rent.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
400
4%
300
3%
200
2%
100
1%
0
0%
-1%
-100
BNP Paribas Real Estate Research
Rebound in take-up despite recession
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Italy
Supply increased in all the different sub-markets, even in
the CBD. Thus the prime rent declined during 2014, and
now stands at €480/m²/year. A drop was also registered in
average rents in the CBD and in the other market districts.
Tenants continued to drive the market, securing deals with
lower rents and good incentives. Incentives reached high
levels but are not sufficient anymore to ensure lettings
alone. We anticipate that growth in GDP and employment
will be below 1% pa over the next two years, as such the
Milan market will not record a significant decrease in supply
that will allow rents to grow. Therefore they are likely to
reduce again in 2015 and only stabilise in 2016.
Prime rent - Vacancy rate
Office prime rent
€/m2/year
Office vacancy rate
600
14%
550
12%
500
10%
450
8%
400
6%
350
4%
BNP Paribas Real Estate Research
Further rental reduction
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Commercial real estate investment volume fell by 9% from
a very strong 2013 to €1.2 billion. Investment activity
may improve in 2015 as buyers are looking actively at the
Italian market. Specifically there is a strong interest again
for investing in Milanese offices. The two main areas of
interest are around Piazza Cordusio, the main square of the
CBD, and between the two train stations of Porta Garibaldi
and Centrale, the new CBD area. The increased activity in
the market, particularly in the CBD and the Semi Central
areas, triggered a decline in prime yields down by 35 basis
points to 5.40%. This trend should continue for prime assets.
However, the lack of products will push investors to look at
value-added properties.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
4,000
6.5%
3,000
6.0%
2,000
5.5%
1,000
5.0%
04
05
06
07
08
09
10
11
12
13
14
BNP Paribas Real Estate Research
A lack of good products
Moscow
The economic crisis that hit Russia in 2014 impacted strongly
on the office market in Moscow. During the whole year, the
market showed negative dynamics in all key indicators.
First, plans to increase the number of staff were deferred
and subsequently followed by job cuts in many companies.
This led to a lack of demand for new office space, and
consequently contributed to the increase in the vacancy
rate and downward pressure on rents. The volume of net
absorption, reflecting demand for office space, significantly
decreased this year.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
2,500
5%
2,000
4%
1,500
3%
1,000
2%
500
1%
BNP Paribas Real Estate Research
Key indicators are all turning negative
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Russia
By the end of the year, 17% of the existing office space
remained unoccupied. This has been the highest level
of vacancy in Moscow since 2010. The office market is
traditionally a vulnerable sector during macroeconomic
instability. One of the major trends that affected the market
in 2014 is the transfer of commercial real estate pricing from
dollars into rubles. The transition of many owners to ruble
rental values has been mainly evident in grade B+ offices.
Against the background of increasing supply, owners have
had to be flexible and make further concessions to tenants,
adjusting rents and providing various types of incentives.
Prime rent - Vacancy rate
Office prime rent
€/m2/year
Office vacancy rate
1,000
25%
800
20%
600
15%
400
10%
200
5%
BNP Paribas Real Estate Research
Vacancy rate on the rise
01 02 03 04 05 06 07 08 09 10 11 12 13 14
The volume of investment in 2014 amounted to €3.125 billion,
a 60% decrease compared with 2013. Most funds were
invested in office, 40% of total real estate investment. Yields
are subject to upwards pressure and will increase in 2015.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
7,500
13%
6,000
12%
4,500
11%
3,000
10%
1,500
9%
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Investment dropped by more than 60% in 2014
14
33
Munich
Totalling 597,000 m², office take-up in Munich finished 2014
on a par with the 2013 figure (603,000 m²) but more than 12%
down on the ten-year average. A contrast is that the owneroccupier proportion was greatly reduced whereas the year
before this factor had contributed over 90,000 m². Therefore
the actual volume of lettings, excluding owner-occupier
deals, increased quite appreciably in 2014. For once, Munich,
a regular winner, failed to head the national ranking and
was relegated to second place by Berlin. The biggest deals
included those concluded by Brainlab (21,300 m²), BayWa
AG (20,000 m²) and Panasonic Automotive (12,200 m²).
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
1,000
2.5%
800
2.0%
600
1.5%
400
1.0%
200
0.5%
0
0.0%
BNP Paribas Real Estate Research
Take-up remained stable
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Germany
As expected, the reduction in vacancy has slowed down.
Amounting to 1.27 million m², vacant office space was 2%
lower than at the end of 2013 and in the final quarter, the
volume actually increased slightly. Modern unoccupied
premises now total 337,000 m², corresponding to 27% of
aggregate vacancy, still at low levels by national standards.
In the market as a whole the vacancy rate is 6.2%. In
some parts of the favoured downtown precincts there is a
shortage of high-grade modern premises, and in 2014 this
led to a rise of 3% in the prime rent to €414/m². As before,
this is achieved in the City Centre. Rents have also climbed
in several other office market zones.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
450
11%
400
9%
350
7%
300
5%
250
3%
BNP Paribas Real Estate Research
Decline in vacancy is slowing
01 02 03 04 05 06 07 08 09 10 11 12 13 14
With aggregate turnover of close to €5.4 billion, the Munich
investment market outpaced the already very good 2013
figure by 13% and achieved the second-largest investment
volume ever recorded. Only the boom year of 2007 saw a
higher result. The ten-year average was actually exceeded
by well over 50%. This outstanding performance was fuelled
both by a very large number of single asset deals and also by
a whole series of substantial transactions in the triple-digit
million range – 14 altogether. In the past twelve months,
the buoyant scale of demand, especially for high-grade core
assets, the competition among investors and the historically
low 10-year Bund led to a further compression in the office
prime yield to 4.25%.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
8,000
6.0%
6,000
5.5%
4,000
5.0%
2,000
4.5%
01 02 03 04 05 06 07 08 09 10 11 12 13 14
BNP Paribas Real Estate Research
Historic low prime yields
Oslo
Growth in employment services remained stable and the
unemployment rate was still extremely low (3.5%). In 2014,
GDP grew by 1.8% and is anticipated to increase by 2.3% in
2015. The upside growth potential will probably be hindered
by falling oil prices and reduced exports. In this context,
take-up decreased slightly and occupiers have been more
cautious in a number of criteria when renting including
quality of the building, location and rationalisation of space
before moving to another building.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
200
4%
150
3%
100
2%
50
1%
0
0%
-1%
-50
BNP Paribas Real Estate Research
Slight decrease in demand as occupiers show
caution
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Norway
€/m2/year
Office prime rent
9%
600
8%
500
7%
400
6%
300
5%
200
4%
100
3%
10
Real estate yields continued to decline over the year
Since 2009 there has been a steady increase in investments
in the Norwegian office market. Likewise there has been a
steady decline in the office net prime yield, going as far back
as 2008. 2014 ended with a prime yield of 4.75%, down from
5.00%. Low interest rates and a volatile stock market make
real estate a relatively more attractive asset class, offering a
higher return relative to risk. This has, and is likely continue,
to put downward pressure on the prime yield.
Office vacancy rate
700
11
12
13
BNP Paribas Real Estate Research
Rent levels in Oslo continued their growth reflecting a
strong demand for top quality premises and limited supply
for such products. The office vacancy rate stabilised at
8.1% by the end of 2014 and vacant office space accounted
for 800,000 m2 in Greater Oslo. A further 120,000 m² of
deliveries is expected for 2015. Vacancy varies greatly when
segmented by submarket, with central areas and inner city
low and relatively stable.
Prime rent - Vacancy rate
14
Norway - Investment - Yield
€ million
Office investment
Other investment
Office prime yield
10,000
7.0%
8,000
6.5%
6,000
6.0%
4,000
5.5%
2,000
5.0%
04
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Rental growth reflects limited supply of prime
products
14
35
Central Paris
Employment growth in France remained stable in 2014
(+0.1%). However, employment in Île-de-France, driven by
the service sector, proved resilient compared to the rest of
France with 10,000 jobs estimated to have been created in
2014. As a consequence, take-up in the Central Paris office
market climbed by 13% over 2013 to 1.8 million m². Large
units were the most robust performers. As such, deals
over 5,000 m² bounced back by 31% in 2014 versus 2013.
Small and medium-sized units remained a solid base for
the market, showing a 4% increase. The traditional business
districts (Paris inner city, Neuilly-Levallois and La Défense
especially) performed most strongly over 2014. Conversely,
the other districts of the Western Crescent and the Inner
Rim failed to reach their ten-year average.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
2,500
5%
2,000
4%
1,500
3%
1,000
2%
500
1%
0
0%
BNP Paribas Real Estate Research
Sharp upturn in take-up over 2014
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for France
The vacancy rate now stands at 8.3%, compared to just 8.2%
at the end of 2013. It remains the highest in the districts of
the Western Crescent (16% in Péri-Défense) and the lowest
in Paris Inner City (5%). Immediate supply stood above
2.85 million m² as of December 2014, including only 21%
of new offices. The vacancy rate should start to decrease at
the end of 2015, due to the low level of completions in the
recent months. The high availability is holding back rental
growth as tenants have a large choice of quality premises.
Prime rents, which dwindled from €830/m²/year in 2012 to
€750/m²/year in 2013, remained stable in 2014. Likewise,
incentives increased from 18% to 20% in 2014.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
900
10%
800
8%
700
6%
600
4%
BNP Paribas Real Estate Research
The prime rent and the vacancy rate remained stable
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Amounting to €16.8 billion, the investment volume in Central
Paris in 2014 increased outstandingly, up 35% compared to
2013. Offices attracted 78% of investment, with 12 deals for
over €200 million recorded in 2014, including the acquisition
by a Saudi family office of the Risanamento portfolio in Paris
CBD for about €1.2 billion. Given a massive flow of "new
cash" and the low level of the lending rate, the prime yield
continued to decrease to stand at around 4% at the end of
2014. The high levels of risk premium and the strong demand
for "core" assets will push prime yields further down. For
these reasons, a new yield compression - of up to 25 basis
points - can be foreseen in Paris CBD in 2015.
Investment - Yield
€ billion
Office investment
Other investment
Office prime yield
20
7%
15
6%
10
5%
5
4%
01 02 03 04 05 06 07 08 09 10 11 12 13 14
BNP Paribas Real Estate Research
Outstanding performance for the investment market
Prague
Prague’s letting activity was dominated by new lease deals.
Nearly 189,000 m² of offices were taken up in 2014 with new
deals accounting for almost 61% of all lease transactions. The
last quarter was particularly active generating 77,000 m² of
new leases. Net leasing activity in 2014 reached the secondhighest level of the past 6 years; only 2011 ranked higher
with a figure exceeding 200,000 m².
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
300
4%
225
3%
150
2%
75
1%
0
0%
-1%
-75
BNP Paribas Real Estate Research
Significant net take-up level recorded in Prague
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for the Czech Republic
Supply coming onto the market continued to drive the
vacancy rate upwards in the last quarter of 2014 where it
reached 15.4%. Even higher office vacancy can be expected
in 2015. Prime rents continued to decrease further in the
CBD of Prague to €19.50/m²/month in 2014. Prime rents
in the rest of Prague stagnated and ranged from €15.00 –
17.50/m²/month in Inner City and €13.00 – 14.50/m²/month
in Outer City.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
300
16%
275
14%
250
12%
225
10%
200
8%
175
6%
BNP Paribas Real Estate Research
Excess supply is seeing the vacancy rate rise
01 02 03 04 05 06 07 08 09 10 11 12 13 14
In the past three years the trend for investment activity
has moved upwards with almost €2 billion transacted
just during 2014. The Czech Republic experienced a
53% increase in investment volume compared to the
€1.3 billion registered in the previous year and also saw
the third strongest investment performance ever recorded.
The industrial market was the most active sector in 2014
followed by the office and retail segments. The market was
particularly boosted by one of the largest single logistics
deal recorded in Europe during the year: VGP and its jointventure partner Tristan Capital Partners sold a portfolio of
prime logistics assets in the Czech Republic to Prague-based
PointPark Properties (P3) for €523 million.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
2,500
10%
2,000
9%
1,500
8%
1,000
7%
500
6%
BNP Paribas Real Estate Research
Strong investment activity boosted by one major
logistics deal
01 02 03 04 05 06 07 08 09 10 11 12 13 14
37
Riga
Total office absorption during 2014 reached more than
39,000 m², which is three times higher than it was in 2013.
Absorption was boosted by the relocation of the State
Revenue office HQ into 41,000 m² at Talejas street 1. The
office market was mainly driven by comparatively large
relocations of existing players, and by the entrance of several
newcomers establishing shared service centres and back
offices functions. These include the American corporation
Cabot, SSC Allnex and the aviation company Primera Air.
During 2014, IT companies as well as SSC/BSC (shared &
business service centres) were the most active players in
the Riga office market, accounting for 50% of total take-up.
Net absorption - Employment
000 m2
Office net absorption
Employment growth (services)*
100
10%
50
5%
0
0%
-50
-5%
-100
-10%
BNP Paribas Real Estate Research
Office market pushed up by major deals
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics - Data for Latvia
€/m2/year
Office prime rent
30%
250
25%
200
20%
150
15%
100
10%
50
5%
03
Foreign investors actively looking for city centre
buildings
With a transaction volume of €130 million the Riga investment
market achieved good results again, exceeding the long-term
average figure. As expected though, the total was lower by 25%
than the previous year due to geopolitical uncertainty, global
economic slowdown and cautiousness among investors. Office
investment accounted for more than 30% of the total real estate
investment volume. The most active investors in 2014 came
originally from Sweden, Estonia and Norway such as Nordic
and Baltic Property Group (NBP), EfTEN Capital, New Agenda
Partners. EfTEN Capital has been active by investing more than
€37.6 million in the office and industrial segments during 2014.
Investors have been looking for well-located office buildings,
especially in the city centre. This activity led the net office
prime yield in Riga to decrease to 7.25%.
Office vacancy rate
300
04
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Moderate growth in prime rents continued in Riga during
2014 due to shortage of new developments and low vacancy
in prime locations. Prime office rents in the CBD rose by
10.5% on average whilst rents for other modern offices
remained stable throughout the year. At the end of 2014,
the office vacancy rate stood at 8.5%. It increased slightly
over 2013 due to second-hand supply released into the
market. Whilst the vacancy rate for grade A offices was still
at 3.7%, it rose by 1.1% for grade B office space to 9.4%. Given
the insufficient new supply during the next two years, it is
expected that vacancy rates will decrease slightly.
Prime rent - Vacancy rate
14
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
400
13%
300
11%
200
9%
100
7%
05
06
07
08
09
10
11
12
13
14
BNP Paribas Real Estate Research
Second-hand supply led to increased office vacancy rate
Rome
Take-up activity in Rome was low in 2014 with few deals
recorded. The largest one was the 27,000 m² transaction
initiated by Wind in the new development Europarco in the
Greater Eur district. The Europarco has attracted important
companies such as P&G, Cofely, Wind, Atac and Provincia
di Roma in new offices, close to the Core Eur district. The
occupier market in Rome is facing three main problems.
Firstly, the difficult economic situation does not encourage
companies to move but rather to renegotiate their leases.
Secondly, the public sector, the main driver of the market, is
less active than in the past. Finally, the abundant low quality
vacant space and the shortage of well-located new supply
restrain occupiers in their plan to move.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
300
4%
225
3%
150
2%
75
1%
0
0%
-1%
-75
BNP Paribas Real Estate Research
Take-up activity is still reducing
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Italy
The volume of supply in Rome continued to increase as the
recession led companies to release space. In this context,
new office developments do not start before securing a
tenant. The result is that the office stock in the capital is
dated, in some cases obsolete and not renewed, whereas the
few developments that exist have difficulties being absorbed
by the market. The office supply increase and demand
reduction continued to put rents under pressure. Some
tenants try to renegotiate their lease contract to obtain a
rental reduction. This is the case also for new leases since
the market is driven by companies that want to reduce their
real estate cost.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
550
9%
500
8%
450
7%
400
6%
350
5%
BNP Paribas Real Estate Research
Abundant vacancy puts rents under pressure
01 02 03 04 05 06 07 08 09 10 11 12 13 14
The Roman investment market did not follow the same
trend of increase seen in the Italian market since volumes in
the city remained low. It amounted to €717 million in 2014,
of which €585 million just in the fourth quarter. The deals
closed are quite significant in terms of size and product:
GIC bought the remaining part of Roma Est shopping centre
and the Qatar Investment Authority bought two other hotels
including the St Regis. Concerning American investors, the
main one was Colony Capitals who purchased 14 "villini"
from Unicredit. This last transaction is a good example
of what the city lacks; a value-added operation on trophy
assets. The few office transactions recorded led to a
reduction in prime yields, the first in years. Likewise in most
cities in Western Europe, this trend will carry on in 2015 for
prime products.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
2,500
6.5%
2,000
6.0%
1,500
5.5%
1,000
5.0%
500
4.5%
04
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Low investment volume
14
39
Saint Petersburg
Despite the economic crisis, overall demand for office space
in 2014 remained stable, especially for grade B properties.
Unsurprisingly Grade A offices in current conditions are less
in demand because economic conditions have changed.
Companies are now more cautious, renting less space than
they had initially planned and opting for the most cost
effective units. At the beginning of the year the most popular
premises ranged from 200 to 500 m². At the end of 2014,
demand shifted towards offices of 100 to 200 m². They also
moved into offices with lower rents, or sublet part of their
premises to offset costs. Companies are not choosing to
move to locations that are perceived as showing excessive
rents.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
500
5%
400
4%
300
3%
200
2%
100
1%
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Office space is being optimized
14
*Oxford Economics / BNP Paribas - Data for Russia
During 2014 the office market became tenant friendly, a
result of increased vacancy rates and weaker activity. This
forced owners to be more pliant in determining rents and
in 2015 this trend is expected to continue. There are few
expectations of rental growth and because of financial
difficulties, future rents will be established in Russian ruble
only. New office centres, which are planned to open in 2015,
will be faced with occupancy issues and it will be difficult
to find the same volume of tenants as in 2014. Taking into
consideration the current political and economic situation
and complicated access to financing, new projects are not
expected to appear in 2015.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
800
25%
600
20%
400
15%
200
10%
BNP Paribas Real Estate Research
Tenants are determining lease conditions
01 02 03 04 05 06 07 08 09 10 11 12 13 14
A predictable rise in yields and a reduction of investment
volume appeared in 2014. The volume of real estate
investment dropped to less than €280 million and office
prime yields increased to 11.0% in 2014. This is believed to
be only a beginning; this process is expected to continue in
2015.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
2,000
15%
1,600
12%
1,200
9%
800
6%
400
3%
08
09
10
11
12
13
14
BNP Paribas Real Estate Research
First signs of investment decline
Stockholm
Employment in Stockholm is continuing to show a stable rate
of increase. Stockholm’s labour market is strongly serviceoriented and accounts for almost one-third of employment.
It is the employment growth within the service sector in
Stockholm that, more than anything, stimulates demand
for high-quality office premises in good locations. This
sector as well as private consumption will both continue
to be important growth engines in the coming years. Key
variables like cost per employee are becoming more decisive,
resulting in even more efficient use of office premises and
the regrouping strategies of many larger companies. A high
proportion of pre-lets show a steady demand for office
premises whereas inefficient offices are being converted for
other use.
Net absorption - Employment
000 m2
Office net absorption
Employment growth (services)*
450
3%
300
2%
150
1%
0
0%
-1%
-150
BNP Paribas Real Estate Research
Steady demand for high quality offices
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Sweden
Office investment more than doubled in 2014
Factors such as the low interest-rate level, the lack of highyielding alternatives and good access to financing resulted
in a transaction volume approaching previous record years.
Stockholm dominated geographically but only two of the ten
largest transactions actually took place in the Stockholm
area; few of the largest transactions occurred in the CBD.
Offices continue to be the dominant investment category
and yields have fallen in prime locations in the inner city
and suburbs. Private and listed property companies were
the largest investors. Private property companies were also
active on the selling side, thanks to a refinement in property
portfolios during the past year. Foreign investors accounted
for several of the year’s largest transactions; however the
total proportion of domestic buyers remained high.
€/m2/year
Office prime rent
Office vacancy rate
600
13%
550
12%
500
11%
450
10%
400
9%
350
8%
BNP Paribas Real Estate Research
The rental growth gathered speed in 2014 and the market
rent for newly renovated and space-efficient properties in
Stockholm CBD now stands at €502/m² (SEK4,650). Rents
are expected to continue to rise during 2015 and 2016. High
demand for new and modernised premises will keep upward
pressure on rents. This is the result of the low supply of
office space in the CBD that will continue for the next few
years despite new developments and refurbishments. The
shortage of available office space together with a strong
and office-dependent service sector have resulted in a
low vacancy rate of about 4% in the CBD. Following the
completion of several CBD projects and the movement of
several larger companies to office areas outside the Inner
city, the vacancy rate is expected to reach 4.5% in 2015 and
5.5% in 2016.
Prime rent - Vacancy rate
02 03 04 05 06 07 08 09 10 11 12 13 14
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
10,000
6.0%
8,000
5.5%
6,000
5.0%
4,000
4.5%
2,000
4.0%
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Low vacancy rate in the CBD pushes rents up
14
41
Tallinn
Many new projects were started during 2014 but actual
deliveries accounted for only around 19,000 m². Supply is
expected to increase as several large-scale projects will
be delivered in 2016-2017. Net absorption has moved in
accordance with the volume of office completions. Estonian
labour market indicators have been positive, especially
compared to other countries of the Eurozone. Services
employment has been growing since 2011 and unemployment
rate has halved over the past five years to stand at 7.5% in
2014. Nevertheless structural unemployment still exists in
some economic sectors and a lack of available labour force
in other industries.
Net absorption - Employment
000 m2
Office net absorption
Employment growth (services)*
90
7.5%
60
5.0%
30
2.5%
0
0.0%
-2.5%
-30
BNP Paribas Real Estate Research
Supply boost to come from increased development
activity
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics - Data for Estonia
In 2014 the vacancy rate remained the same as the previous
year: below 4% for grade A offices and 6% for grade B, with
slight decrease in grade A. Such segmentation is derived
from market demand. Despite moderate optimism with the
economy and uncertainty caused by geopolitical reasons,
tenants realize that the total expenses of new quality
premises will be lower compared to amortize grade B spaces.
Prime rents will keep moving up until the completion of new
offices in the next few years that will help bring stabilisation.
It will also create stronger negotiation power for tenants.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
220
20%
200
16%
180
12%
160
8%
140
4%
BNP Paribas Real Estate Research
Increases in the prime rent are likely to slow
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Total investment in Tallinn remained stable to €85 million
in 2014 compared to 2013, whilst it decreased by 24% in
overall Estonia to €106 million. This decline was caused
by uncertainty in the market as well as a shortage of highgrade investment projects. Local investors have been the
main players, taking advantage of strong knowledge of the
local market. The industrial/logistics and retail segments
were the most active market segments, and yields in these
segments have compressed. In 2015, little increase in
real estate investment is expected and focus will remain
on properties with re-development potential. Despite the
overall decrease in investment volume, office investment
rose in 2014 and yields declined.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
250
12%
200
10%
150
8%
100
6%
50
4%
04
05
06
07
08
09
10
11
12
13
14
BNP Paribas Real Estate Research
Steady investment activity driven by local buyers
Vienna
Office take-up in Vienna declined in 2014 to 250,000 m².
This represented a drop of 17% in comparison to 2013
and reflecting a slow start to the year before take-up
gained momentum in the second half of 2014. The highest
transaction volumes were recorded in the CBD and the
Central Station area, followed by Wienerberg.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
600
3.0%
500
2.5%
400
2.0%
300
1.5%
200
1.0%
100
0.5%
BNP Paribas Real Estate Research
Slow momentum leaves take-up down
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Austria
The prime rent slightly increased in 2014 to €309/m²/year,
reflecting the shortage of supply for prime premises, while
the average rent in the CBD remained constant at around
€216/m²/year. Globally, rents have slightly risen for secondhand offices located in quality locations. However, older
office buildings or properties located in peripheral areas
with poor transport connections have been receiving less
demand, thus still recording falling rents. On the supply side,
the limited development activity has kept the vacancy rate
at around 6.6% in 2014. Current projects in the pipeline for
2015 are already pre-let or owner occupied, thus the overall
vacancy rate is expected to remain stable over the year.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
350
8%
300
7%
250
6%
200
5%
150
4%
BNP Paribas Real Estate Research
Scarcity of high quality supply pushed prime rents up
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Commercial real estate investment volumes in Austria
nearly reached the pre-crisis record level. In Vienna the
market volume nearly doubled compared to 2013 and
reached €2 billion. Office remained the most favoured assets
representing a 70% share of the total investment volume.
Investors have focused on prime assets with good location,
long-term leases and good tenants. However, decreasing
supply of such buildings due to continuous decline in new
deliveries is maintaining fierce competition and high prices.
As a consequence, investors showed increased interest
in properties with uplift potential. At the end of 2014 the
prime yield in Vienna slightly declined by 20 bp compared to
Q4 2013 and reached an historic low of 4.70%.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
3,000
6.00%
2,500
5.75%
2,000
5.50%
1,500
5.25%
1,000
5.00%
500
4.75%
BNP Paribas Real Estate Research
Investment volume back to pre-crisis levels
01 02 03 04 05 06 07 08 09 10 11 12 13 14
43
Vilnius
At the end of 2014 the stock of modern offices in Vilnius
rose by 5.2% to reach 405,000 m². It is expected that during
2015–2017 the Vilnius office market will increase by
150,000 m² of modern office space. Developers no longer
focus on prime premises only. Indeed, half of the planned
office developments will be accounted for by grade B offices
located outside the CBD. High office demand in 2014 led to
positive market absorption largely exceeding the volume
of new supply available. The largest lease transactions
recorded in 2014 were made by shared service centres and
IT companies that occupy over 20% of all office stock in
Vilnius. The trend for pre-lets is occurring again in Vilnius
and agreements have often been signed 6 to 9 months in
advance. It is expected that market absorption will follow
the supply trend in 2015.
Net absorption - Employment
000 m2
Office net absorption
Employment growth (services)*
100
10%
80
8%
60
6%
40
4%
20
2%
0
0
-20
-2%
BNP Paribas Real Estate Research
Strong net absorption from high demand
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics - Data for Lithuania
Vacant space of modern office buildings, especially in the
CBD of Vilnius, was very low at the end of 2014. The vacancy
rate for prime offices even fell below 0.5% at the end of
2014 with no major completions in this segment for grade
A properties. High demand for quality premises in grade
B offices forced supply in this segment to decline as well;
the vacancy rate dropped quickly from 8.5% in Q1 to 3.3%
in Q4. Record low supply turned the Vilnius office market
into a landlords’ market, where asking rents could be easily
increased. However this trend cannot last for long as new
buildings are coming to the market, especially in the prime
segment, and the old ones will be forced to face competition.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
Office vacancy rate
250
20%
200
16%
150
12%
100
8%
50
4%
BNP Paribas Real Estate Research
Vacancy rates hit bottom
01 02 03 04 05 06 07 08 09 10 11 12 13 14
Real estate investment in Vilnius reached €178 million in
2014 and was the highest among Baltic capitals. Office
investment was the most active segment and covered
72% of all investment. Local, Nordic and Russian investors
were again the key players in the Baltic market in 2014.
International investors who were previously reluctant to
enter the Baltic region are currently investigating possibilities
to include the region in their investment strategies. Although
yields have decreased significantly in recent years, there is
still an attractive gap compared to Western European levels.
Average yields for prime office assets are around 7.00% and
the most attractive properties could stand 50 basis points
lower. Lithuania followed the path of Estonia and Latvia in
transferring currency risk to the Euro when it joined the
Eurozone on 1st January 2015.
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
200
12%
160
10%
120
8%
80
6%
40
4%
04
05
06
07
08
09
10
11
12
13
14
BNP Paribas Real Estate Research
Record investment volumes boosted by offices
Warsaw
Net take-up in 2014 amounted to around 400,000 m²,
representing a 10% decline compared with the corresponding
period last year although still above the long-term average.
Renegotiations accounted for an additional 170,000 m².
Considering the positive forecast for the Polish economy and
the vibrant business environment in Warsaw, the volume
of net take-up is expected to remain relatively stable over
the course of 2015-2016. Due to a large amount of office
vacant space currently available on the market, occupiers
will continue to have a strong negotiation position. Indeed,
with nearly 290,000 m² completed in 2014, the total stock
in Warsaw crept above 4.4 million m². A total of 550,000 m²
is currently under construction, of which approximately 60%
will be delivered by the end of 2015.
Take-up - Employment
000 m2
Office take-up
Employment growth (services)*
500
10%
400
8%
300
6%
200
4%
100
2%
0
0%
-2%
-100
BNP Paribas Real Estate Research
A market dominated by high level of deliveries
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Poland
€/m2/year
With a total volume of €1.1 billion spent on Warsaw offices in
2014, the market share of the capital city accounted for 34%
of the overall investment market in Poland. It represents a
60% y-o-y increase, boosted with large deals such as the sale
of "Rondo 1" for €295 million or "Plac Unii" for €226 million.
The pressure from reducing demand and the potential hike
in the vacancy rate is exerting a negative impact on rents,
both headline and effective. Consequently the office prime
yield is also moving up, growing by 0.25 bps over the last six
months to stand currently at 6.15%.
Office vacancy rate
20%
350
15%
300
10%
250
5%
03
Weaker demand plus development pushes yields up
Office prime rent
400
04
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
At the end 2014 over 607,000 m² of office space remained
available, representing a vacancy rate of 13.7%. Compared
with the same period last year it rose by 2 percentage point.
Central locations recorded a higher vacancy rate with 15.5%,
while in non-central areas it was closer to 13%. This rise
would have been stronger if a large part of completions
scheduled for delivery was not postponed. The upward trend
in vacancy is likely to continue over the next 18-24 months
and the vacancy rate could climb to more than 16% in
2015. The bulk of vacant space is concentrated in buildings
more than 15 years old. However, prime and well-managed
schemes within key submarkets should remain relatively
resistant to negative market trends.
Prime rent - Vacancy rate
14
Investment - Yield
€ million
Office investment
Other investment
Office prime yield
3,000
10%
2,500
9%
2,000
8%
1,500
7%
1,000
6%
500
5%
03
04
05
06
07
08
09
10
11
12
13
BNP Paribas Real Estate Research
Completions see the vacancy rate increase
14
45
Zurich
Total office stock has been growing constantly in Zurich
with low vacancy rates. Throughout 2014, large companies
reorganized their back offices and moved into new and
refurbished buildings. These movements contributed to an
increase in vacant space in downtown Zurich as demand
was not able to absorb the ongoing growth in office stock.
Compared to other major cities, Zurich is still a stable
market. However, not all offices under construction or under
refurbishment have been pre-let.
Take-up - Employment
000 m2
Office net absorption**
Employment growth (services)*
200
4%
150
3%
100
2%
50
1%
BNP Paribas Real Estate Research
Increasing vacant space in downtown Zurich
01 02 03 04 05 06 07 08 09 10 11 12 13 14
*Oxford Economics / BNP Paribas - Data for Switzerland - **estimation for 2014
The vacancy rate is likely to grow further in the next few
months as supply exceeds demand. Indeed, offices currently
undergoing refurbishment will enter into the calculation
of the vacancy rate when delivered. Prime rents in the
city of Zurich have been declining over the past three
years reflecting the increasing volume of vacant space.
The market has become a tenant’s market and landlords
have been willing to grant incentives by staggering rents
or by offering cost-sharing for major roll-outs rather than
lowering headline rents.
Prime rent - Vacancy rate
€/m2/year
Office prime rent
4%
900
3%
800
2%
700
1%
07
Prime yields for core assets have declined due to growing
demand by institutional real estate owners seeking return
in a situation of decreasing yields on government bonds. As
real estate is still considered to be an excellent safe haven
and adequate alternatives are still missing, prices for core
assets are still increasing. Fully let commercial properties
in prime locations are in high demand. Low net prime yields
are specific to these buildings. As long as mortgage rates
stay at an all-time low, real estate investment will remain
attractive. As the central bank of Switzerland has imposed
negative interest rates on bank deposits, it is likely that
mortgage rates will remain at low levels in the near future.
08
09
10
11
12
13
14
Yield
Office prime yield
5.0%
4.5%
4.0%
BNP Paribas Real Estate Research
Real estate assets remain attractive
Office vacancy rate
1,000
BNP Paribas Real Estate Research
A tenant’s market is pushing rents down
3.5%
3.0%
07
08
09
10
11
12
13
14
47
Glossary
BNP Paribas Real Estate is working on producing indicators which are as
comparable as possible. This is a complex issue, due to cultural differences
from market to market. Nevertheless, as we aim to actively contribute to
the transparency of the markets, we have highlighted those definitions
and indicators which are strictly comparable, so that our readers can
understand what the indicators mean.
Furthermore we have decided to adopt the PEPCIG1 definitions, on which
most of the following indicators published by BNP Paribas Real Estate are
based. Other indicators are from INREV2 and from BNP Paribas Real Estate .
Central Business District average rent is the average of each of the last
four quarters’ average headline rent in the CBD. Each quarterly average
rent is weighted by the surface of each lease signed during the quarter, in
either new or second-hand premises. The definition of CBD corresponds
to local conventions.
Completions represent the total amount of floor space that has reached
practical completion and is occupied, ready for occupation or an occupancy
permit where required has been issued during the survey period.
Central London includes the following districts: West End, Midtown, City,
Docklands, Southbank, Western Fringe and Northern Fringe.
Central Paris includes the following districts: CBD, Paris out of CBD, La
Défense, Western Crescent and Inner Rim.
Core Investment Vehicles target returns at 11.5% and lower, with gearing
level up to 60% of Gross Asset Value.
Closed Ended Fund is a vehicle that has a targeted range of investor
capital and a finite life.
Development Pipeline represents the total amount of floor space for
all developments under construction and/or schemes (including major
refurbishments) that have the potential to be built in the future through
having a secured level of planning permission but remain unimplemented
at the survey date. It includes all proposed new buildings, those
constructed behind retained facades and buildings (or parts of buildings)
undergoing a change of use to offices.
German Open Ended Fund is a public vehicle that does not have a finite
life, continually accepts new investor capital and makes new property
investments. The list of German Open Ended Funds is published by the
BVI (Bundesverband Investment und Asset Management e.V.).
Opportunistic Investment Vehicles target returns in excess of 17%, with
gearing levels above 60% of Gross Asset Value.
Actual transactions are used in France, Germany and Belgium to support
the headline prime rental quoted, but one-off deals, which do not represent
the market, are disregarded. In the UK & Spain, if there are no prime
transactions during the survey period a hypothetical rent is quoted, based
on expert opinion of market conditions.
Space calculation differs in Spain, where figures in m² (Take-Up, Vacancy,
Pipeline, Completions) as well as Rental values are based on Gross Letting
Area space, contrary to the other main European markets, which use Net
Letting Area. In order to make the Spanish figures comparable across all
monitored markets, they should be multiplied by 0.82 (NLA = 0.82 GLA).
This ratio is applied by BNP Paribas Real Estate to produce international
indices and benchmarks.
Take-Up represents the total floor space known to have been let or pre-let,
sold or pre-sold to tenants or owner-occupiers during the survey period.
It does not include space that is under offer
- A property is deemed to be “taken-up” only when contracts are signed
or a binding agreement exists
- Pre-let refers to take-up that was either in the planning or construction
stage
- All deals (including pre-lets) are recorded in the period in which they
are signed
- Contract renewals are not included
- Sales and leasebacks are not included as there had been no change in
occupation
- Quoted take-up volumes are not definitive and are consequently subject
to change.
The breakdown of take-up by business sector is compatible with the
European NACE code.
Under Construction represents the total amount of floor space in
properties where construction has commenced (on a new development
or a major refurbishment) at the survey date. It includes properties for
owner occupation, which are reported separately. It does not include sites
being cleared for possible development in the future.
Property that is under construction but pre-let or for owner occupation is
recorded separately where appropriate.
Gross Asset Value is the sum of the Gross Capital Value of properties, cash
and marketable securities and other (non-operating) assets.
Value-added Investment Vehicles target returns of 11.5% to 17%, with
gearing levels between 30% and 70% of Gross Asset Value.
Investment volume takes into account all commercial properties BNP
Paribas Real Estate is aware of, whose owner has changed during
the studied period, whatever the purchasing price. It includes Office
buildings, Retail (supermarkets, hypermarkets), Industrial and Logistics
Warehousing and Others (Hotels, Cinema, Leisure, Car Parks, Care Homes,
parts of portfolio which cannot be split up by product, and Development
Sites in Germany). Quoted investment volumes are not definitive and are
consequently subject to change.
Vacancy represents the total floor space in existing properties, which are
physically vacant, ready for occupation in the next three months (this
period covers fit-out time) and being actively marketed at the survey date.
Vacancy includes sublet space (except in Germany), but where possible,
vacant sub-let space is recorded separately.
In France, vacancy excludes premises which the owner will renovate only
once a lease is signed. Spain only counts immediately available space.
Prime Rent/Yield represents the top open-market rent/net yield at the
survey date (or in Q4 for annual data) for an office unit:
- of standard size commensurate with demand in each location
- of the highest quality and specification
- in the best location in a market
Initial Gross Yield is defined as Gross income (i.e. income before costs of
ownership) over purchase price excluding costs of acquisition.
Initial Net Yield is defined as Net income (or NOI) over purchase price plus
all other costs of acquisition.
Investment volume by investor/seller type refers to the following
categories: Insurance, Private Investors, Public Sector, Corporates,
Property Companies & REITS, Consortium, Funds and Other.
Investment volume by investor/seller nationality refers to the following
categories: Eurozone, Non-Eurozone, North America, Other America, Asia,
Middle East, Australia, International and Other.
Major Refurbishments represent refurbishments, where building
work must involve either structural alteration, and/or the substantial
replacement of the main services and finishes. The quality of the floor
space must have been substantially improved from its previous condition
so as to offer accommodation of a modern standard – although not
necessarily to the standard of a completely new building.
Vacancy Rate represents the total vacant floor space including sublettings divided by the total stock at the survey date (or in Q4 for annual
data).
1
Pan-European Property Common Interest Group. This group assembles a
wide range of European advisors and investors and major agents.
2
European Association for Investors in Non-listed Real Estate Vehicles.
BNP Paribas Real Estate Disclaimer clause
BNP Paribas Real Estate cannot be held responsible if, despite its best
efforts, the information contained in the present report turns out to be
inaccurate or incomplete. This report is released by BNP Paribas Real Estate
and the information in it is dedicated to the exclusive use of its clients. The
report and the information contained in it may not be copied or reproduced
without prior permission from BNP Paribas Real Estate.
Should you no longer wish to receive this report, or wish to modify the
conditions of reception of this report, please send an e-mail to:
[email protected]
Contacts
RESEARCH
International
Christophe PINEAU
Belgium
Pascal MIKSE
Global Head of Research
[email protected]
Head of Research
[email protected]
Stephen ACKROYD
France
Richard MALLE
Senior Analyst
Handbook & Occupiers
[email protected]
Pau BLASI
Analyst
Investment Management
[email protected]
Céline COTASSON-FAUVET
Head of European Analysis
Investment, Retail & Hotels
[email protected]
Samuel DUAH
Head of Forecating
[email protected]
Maurizio GRILLI
Head of Investment Management
Analysis and Strategy
[email protected]
Vincent ROBION
Head of Research
Logistics & Alliances
[email protected]
Julien SCARPA
Analyst
Offices
[email protected]
Head of Research
[email protected]
Germany
Wolfgang SCHNEIDER
Head of Research
[email protected]
Ireland
Julien SCARPA
Analyst
[email protected]
Italy
Simone ROBERTI
Head of Research
[email protected]
Luxembourg
Pascal MIKSE
Head of Research
[email protected]
Netherlands
Julien SCARPA
Analyst
[email protected]
Poland
Anna STANISZEWSKA
Head of CEE Research
[email protected]
Romania
Catalin MARUNTELU
Head of Research
[email protected]
Spain
Emilie GRADASSI
Head of Research
[email protected]
United Kingdom
Alistair KEMP
Associate Director
[email protected]
49
Hong Kong
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de Stalingrad
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ROMANIA
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U.A.E
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ALGERIA *
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* Coverage via our alliance in Morocco
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***Covering Transaction, Valuation & Consulting
PLEASE CONTACT
Alliances
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Tel.: +33 (0)1 47 59 17 38
[email protected]
Research
Christophe Pineau
Tel.: +33 (0)1 47 59 24 77
[email protected]
Non contractual document - Research department - BNPPRE 167 - March 2015 - 801 copies - Pictures copyrigth: Getty images
BNP Paribas Real Estate: Simplified joint stock company with capital of € 383.071.696 - 692 012 180 RCS Nanterre - Code NAF 7010 Z
CE identification number FR 666 920 121 80 - Headquarters: 167, Quai de la Bataille de Stalingrad - 92867 Issy Les Moulineaux Cedex
BNP Paribas Real Estate is part of the BNP Paribas Banking Group - March 2015
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