European office take up reached 4.1m sq m during H1 2020, down 32% on the first half of 2019 (see below ). This was reflected in a 15% YoY fall in Q1 and a 48% YoY fall during Q2 as lockdowns prevented a number of leasing deals from being signed. La Défense (+191% YoY) and Amsterdam (+19%) were the only markets to register an increase, as Paris CBD (-40% YoY), Berlin (-21%), Madrid (-52%) and Warsaw (-17%) all fell. Deals are continuing to take longer to complete as some active requirements are downgraded to potential requirements.

European offices vacancy rates increased by an average of 30bps to 5.8% during Q2 2020, however, vacancy rates remain at historic lows and well below the historic equilibrium of c.9%, separating rental growth from decline. More focus will be paid towards the rising level of tenant controlled supply, and how this impacts the 'true' vacancy rate. Among the most undersupplied cities remain Berlin (1.2%), Paris CBD (2.0%) and Munich (2.3%) (see below). Speculative development pipelines remain relatively limited and therefore we do not expect any large increases in vacancy rates in core markets.

Average European prime rents held firm during the first half of the year, although we have observed rental declines in London West End (-12%) and Geneva (-10%), against growth in headline rents in Paris CBD (+9%), Hamburg (+7%) and Zurich (+6%).

_{Read the articles within European Offices Outlook below.}