This was due to weak demand within the larger sizebands in some of the key Western Europe and CEE markets.
The EU-27 vacancy rate was effectively flat in the quarter. The largest increases were seen in CEE, which in some markets was due to the completion of new speculative office schemes, rather than the release of secondhand space by occupiers.
Prime rents remained flat in the majority of markets. Some further small declines in southern European markets were offset by marginal increases in a few of the stronger western European and Nordic markets, leaving the EU-27 Prime Office Rent index unchanged at the end of the quarter.
Office completions will pick up in the remainder of 2013 and again in 2014. Significantly, in some of the key Western Europe and CEE markets this will comprise a number of major speculative office schemes, which will add a large volume of new supply to the markets for the first time since the downturn.
The key driver of tenant activity in Bucharest continues to be cost cutting, either by relocating to a more flexible and efficient office building or by renegotiating their existing lease, in both situations under improved financial terms. Consequently, prime rents declined for a second consecutive quarter. (source: CBRE)