With Austria, Denmark, Norway, Germany, Spain and others already starting to relax their Covid-19 lockdowns, many corporate occupiers in Europe are looking to Asia to see what the situation may be once markets return to a certain degree of normality.

In China, the Government is currently limiting occupancy to 50 per cent at all times and all employees have to sit at least one metre apart in the office. At the same time, the risk of infection is being reduced through regular deep cleaning, use of hand sanitiser and plastic protection on lift buttons. On days that employees don’t go into the office, they are expected to continue working from home.

While this may show one possible way of recovery, it’s important to note that not every European country actually went into lockdown, with Sweden remaining largely open. The Swedish model, freedom with responsibility, is very much reflected in how occupiers are handling the situation. Most offices are open but the majority of staff, approximately 80-85 per cent, are working from home. The impact on the office market so far has been limited but companies who are in no rush to relocate are taking a ‘wait and see‘ approach.

One development we expect to see across Europe is a slight upswing for short-term leases. We are already seeing this in Stockholm, although it is still too early to quantify this trend. Just as in other countries, some retail and office occupiers are asking for help to achieve short-term rent abatements and/or rent-free periods. Unlike those in many others countries, the Swedish Government is already proposing that landlords can apply for subsidies to allow rent abatements worth up to 50 per cent for heavily impacted sectors.

Over the last few years, the European office market has favoured landlords given the very low vacancy rates, leaving little room for negotiation. However, one of the key learnings for occupiers in Stockholm or other European cities is that there may be a short-term opportunity to secure more favourable deals for those who are willing to make quick decisions.

Further information

Read more Covid-19: State of the Occupier Update