European office completions to stabilise in 2026, long-term decline expected

Savills' latest research predicts that European office completions will remain stable at 3.5 million square meters in 2026, matching 2025's volume.

European office development completions - Savills

However, this figure represents a 28% drop from the 2022 peak. The market continues to be affected by labour shortages, which caused a significant 21% of projects scheduled for 2025 to be delayed until 2026.

Looking further ahead, Savills anticipates a further 23% year-on-year decline in 2027, with completions falling to 2.7 million m2. This decline is attributed to a lack of new development starts since 2023.

A notable trend is the sharp decrease in speculative office development. Only 1.5% of the upcoming office space in the next two years is speculative, a significant reduction from 3.0% four years ago. Currently, Bucharest (3.6%), London City (3.6%), and London West End (3.2%) have the highest proportion of speculative space among projects slated for completion by the end of 2027.

Mike Barnes, director, European Office Research at Savills, said: “Some bold developers are pushing ahead with schemes in the anticipation of an improving market, with higher rents and the hope of a normalised investment market with stronger pricing outcomes, but, on the whole, equity remains more selective.”

Christina Sigliano, EMEA head of Global Occupier Services at Savills, added: “Given the volume of occupiers competing for prime, centrally-located office space, we expect prime vacancy rates across European cities will remain around the circa 2-3% level over the next few years. This will apply continued upward pressure on headline rents, creating opportunities for asset managers to turn secondary into prime.”