Bucharest office yields increased in second quarter by 25 percent, up to 9.25 percent, while prime office rents fell 12 percent down to 264 euros/sqm/year.
The lower take-up in the first quarter and subdued demand for office space was surfaced by the delivery of new projects. The delivery of new projects has also led to a decline in rents in the office market.
“Several companies had preleases office space in the past, and now they are constrained by the market conditions to sublease the space surplus, as their expansion plans got cancelled”, said Mark Mannering, managing director of King Sturge Romania.
The spread of yields remains wide across Europe, with the highest in Moscow, where yields shifted out by another 100bp to 14.00%. Where falls in rents occurred, the most significant were in Moscow which fell by 17.7% in April-June to 576 euro/sqm/year.
The top cities with the highest yields is led by Moscow and Bucharest, followed in third position by Belgrade with 9% and Sofia and Istanbul with 8.5%.
London (West End) rents continued to slide but remained the most expensive city, where a company pays 850 euros/sqm/year, 10% less than Q1, 2008.
Paris is the second most expensive city, where the office rents reach 650 euro/sqm, down 10.3% from year-ago quarter.
King Sturge is one of the largest European independent property consultants (42 offices in 14 countries), with over 3,800 staff working in 215 independent and associated offices throughout the world, including Europe, Asia Pacific and North America.
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