It is becoming increasingly evident that in the next two years, there will be a noticeable contraction of the resources of office space - said analysts of CBRE in a report The investment market in Central and Eastern Europe. Latest available data show that the new office supply in the European markets will decline by 30 percent. (In Western Europe - 1.8 million square meters) in relation to 2010 Further declines will be observed in 2012.
Central and Eastern Europe: there are no signs of improvement
This year's total office supply in the European markets will decline by 30 percent compared to 2010.
The problem of too low supply due to the reduction of new investments made in the last several months. Some of them had in fact not been taken at all; the rest of the investors moved their investments to further terms waiting for the recovery in the markets. In addition, the developers' concerns related to investment risk and vulnerability in the available methods of financing did not disappear. In all locations it is still very difficult to obtain a development loan and it is unlikely to change anytime soon. This problem is particularly noticeable in saturated markets.
In 2013, forecasts predict a slight increase in the number of completed office buildings - about 12 percent more buildings compared to the previous year. New supply will remain at 50 percent lower than in the peak of 2008.
London is one of the few markets where there was improvement in the conditions for the start of a new cycle of development. Its effects are to be seen in 2013 and 2014, as an increase in the offered space. Signs of recovery are also visible in Paris, where a couple of speculative investments in the western zone of Crescent and Inner Rim started. Most of the investment is financed by equity; the share of debt financing is limited. In Warsaw, developers have recently announced that they are ready to restarts the investments. However, only a few projects can be continued without significant delays and financial obligations resulting from them. In Milan, many projects suspended for the duration of the crisis started to draw attention of developers. However, the cautious attitude of investors in connection with issues related to the authorization for the continuation of the investment process is the cause of slow pace of work. Copenhagen recorded an acceleration of the local market. However, now it can be slowed down by the emerging trend, which is a trend of starting new investments only when at least 50 percent of the building area is rented in the pre-let contracts. The growing importance of this type of agreement is also noticeable in London and Warsaw. In Madrid, in the next few years, there will be 400 thousand sq m of surface available, as developers suspended new investments waiting for the economic recovery.