AEW

'Many office developments will be postponed, downscaled or cancelled over time', predicts AEW



Real estate asset manager AEW has published its latest flash report, which examines the impact of Covid-19 on the European office market.

It states that, as a result of the pandemic, occupiers are reassessing their needs for office space as working from home has been implemented.

As a result, it forecasts rents to come down by nearly 10% this year.

It claimed that Q2 2020 take-up was down by over 20% and vacancy had ticked up by 20 basis points from a low of 5.4% in Q1 2020.

The report highlights that JLL has estimated a decline of 9% in 2020-22 supply across 15 markets since the start of the year, mostly due to delays in construction because of the health and sanitary measures and material shortages.

Furthermore, development-focused land and redevelopment acquisitions as a share of total office acquisitions, have continued their long-term downward trend.

AEW expects that many office developments will be postponed, downscaled of cancelled over time as investors, developers and lenders come to grips with lower occupational demand.


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