Office take-up in Europe up 4%, Prague, Dublin and London lead

Savills reports a 4% year-over-year increase in European office take-up to 1.9 million m² in Q1 2025, projecting a 5% rise for the full year.

Savills Europe take-up Q1

Cities like Prague (+41%), Dublin (+29%), and London City (+26%) saw significant increases compared to their five-year averages. German top 6 cities saw a 13% year-on-year increase, while Madrid also performed well with four consecutive quarters of strong growth.
While office leasing activity generally declined, Prague stood out with a striking 41% increase. Frankfurt also bucked the trend, achieving a record-high Q1 leasing volume, fueled by large deals from Commerzbank and ING.
European office vacancy rates saw a slight increase of 0.1% in Q1 2025, reaching 8.4%, while prime office rents grew 4.5% over the past year, driven by limited high-quality supply, with London West End (+21%), Cologne (+21%), and Paris CBD (+18%) leading the way.
Dublin's office vacancy rate, though still the highest at 17.5%, has stabilized over the past two quarters, hinting at a potential market shift. Germany saw the largest quarterly vacancy increases, particularly in Munich (+120 bps to 12.3%) and Frankfurt (+120 bps to 12.3%), due to returning second-hand space. Conversely, London City (-70 bps to 7.2%) and Copenhagen (-50 bps to 6.6%) experienced the biggest quarterly decreases.
While office completions rose 5% in 2024 to 3.8 million m², they remain below the five-year average of 11%.
Savills predicts completions will peak at 4.3 million m² in 2025 before dropping to 3.1 million m² in 2026, the lowest level since 2017. Significantly, speculative office development has halved as a proportion of total stock over the past three years, down to just 1.6%.
Central London, particularly the West End with its high rents and property values, leads Europe in speculative office development, as developers can still achieve desired returns. Berlin's new office space faces low vacancy rates, while Warsaw's robust leasing activity (+36%) reflects Poland's strong economic growth and increasing demand for office space.
CEE cities like Bucharest, Warsaw, Budapest, and Prague have seen the most substantial new office construction over the past decade, with new stock representing 27% to 39% of their total office space. In contrast, Nordic and German cities have experienced significantly less new development (10-15% of total stock) due to stricter planning regulations.
Development remains viable in European core markets thanks to rent growth and stable yields, while elsewhere, landlords focus on refurbishments to meet market demands and sustainability standards.
Mike Barnes, director in Savills European commercial research team, said: "Vacancy is rising primarily in peripheral locations, while CBD locations remain considerably more resilient. The proportion of speculative deliveries as a percentage of total stock has dropped by half over the last three years to only 1.6%. Increasingly, new schemes are becoming let before completion, reducing the options available to occupiers and adding upward pressure on prime rents. Given a limited speculative pipeline, and the supply of prime stock being increasingly scarce, we believe this will support prime rental growth across major European markets over the next two to three years."
James Burke, director, Global Cross Border Investment at Savills, added: "Investors continue to seek exposure to higher EPC-rated office stock across European cities to maximize operational performance and adhere to fund requirements. CEE markets have the highest proportion of total stock of new offices developed over the last ten years, led by Bucharest (39%), Warsaw (37%), Budapest (32%), and Prague (27%). London City and Dublin's office development has also been strong in recent years."