Thirty-three markets in EMEA (Europe Middle East & Africa) notched increases in occupancy costs as the region’s economic recovery continued to take hold, with 65 percent of European markets moving up by more than three places in the rankings.
Four of the rising markets—Prague, Warsaw, Bucharest, Belgrade—were in Central Europe, which has performed better because of the pick-up in the Eurozone and the benefits it offers in terms of a low-cost location for manufacturing and service sector activity.
Office rent values also significantly increased in several U.K. regional cities, including Manchester, Leeds, Liverpool, Southampton and Belfast, providing evidence of an increasingly positive supply-demand balance for U.K. markets outside London.
Claudia Chistova, Head of Research Department in CBRE, Russia, said:
“By the end of 2015 Moscow has lost its position in the world’s ten most expensive cities and dropped to number 11. Though at the end of 2014 Moscow had the 5th position in the ranking. This is a result of further rents decrease. Prime class A rents went down by 10% during 2015 or by 15-25% compared to the beginning of 2014. Currently, prime class A rents are $800-900 net of OpEx and VAT. Offices in the prime A market segment are under pressure due to the extremely limited level of demand for such space. During three quarters of 2015 the total volume of new lease deals done in the prime class A segment accounted for 20,000 sq m (4% of the total volume of new leases in Moscow), the volume of lease renewals and renegotiations totaled 64,000 sq m (16 % of the total). As a general trend in Moscow office market companies prefer to fix better commercial terms for the short term in their existing business centres. This is largely due to the fact that the end of the crisis is not obvious and it is difficult for companies to plan their future business development.”