Incentives making office space cheaper

Amsterdam: between London & Lisbon

The firm compared 18 key city locations and found that when incentives are taken into account, London's West End remains the most expensive and Lisbon the cheapest.

The study sees Paris Central Business District (CBD) becoming the second most expensive, overtaking the City of London. Istanbul drops from sixth most expensive to 13th place, while Amsterdam slipped from 8th to 11th position.

Increase in rent-free periods

Overall the research finds the average rent-free period has increased from 6.6 months in the first half of 2008 to 8.8 months in the same period in 2009. The highest increase in rent-free periods offered was in Amsterdam (from six to 21 months).

The longest rent-free periods were recorded in London (24-36 months over a typical lease length of 120 months), Amsterdam (21 months over 120 months), Paris La Defense (12 months over 72 months ) and Brussels (nine months over 72 months). In the remaining locations landlords offered six months or less.

Landlord-tenant struggle

“We are finding that although landlords want to secure longer leases and tenants are trying to negotiate shorter leases or break options, in actual fact typical lease lengths have not altered,” said Eri Mistsostergiou of Savills research.

On average, prime CBD effective rents throughout Europe are 11% lower compared to headline rents, while last year they were 9% lower.

Effective vs. headline rents

The highest difference between effective and headline rent in the first half of 2009 was noted in London City (-30%), London West End (-20%), Amsterdam (-18%) and Paris La Defense (-17%). The lowest difference was noted in Athens, Istanbul and Oslo at less than -5%.

Related topics:

Cheap, Flexible Office Space in Amsterdam Canal Belt
Regus Opens First Business Centre in Almere
Regus Opens First Business Centre in Amstelveen