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Office completions in Europe among ‘highest on record’

Though demand by occupiers for commercial space is diminishing because of weakening economies, more than 2m sq. m of office space was completed in Europe in the first quarter of the year – one of the highest levels ever recorded, according to Jones Lang LaSalle.

One of the highest volumes of office space was created in Europe in the first quarter of this year – at a time when the financial crisis is dampening demand for space.

More than 2 million square metres of space was completed, according to Jones Lang LaSalle’s latest Global Market Perspective bulletin, which adds that this is one of the highest on record.

The figure comes amid softening demand for commercial space in the office, industrial and retails sectors, the report said. Vacancy rates at offices across the globe are rising while leasing volumes are slowing. “While initially affecting financial centres, employment is now contracting in most markets,” the report continued, noting that construction of new projects has now slowed.

In the US, where it said the vast majority of metropolitan economies are in recession, leasing activity declined 32 percent compared to the final quarter of 2008. The average asking rent has fallen by 4.6 percent.

At the same time, Jones Lang LaSalle noted how distressed sales were rising, though on the whole the banking sector seemed reluctant to force sales. “There is increasing evidence that banks are actively seeking equity and beginning to work through debt portfolios.”