European take-up Q1-Q3 2025 rose by 3% year on year, lifting average prime office rents by 4.9%
Prime rents rise by 4.9% year on year (YoY)
Year-to-date take up rises 3% YoY despite geopolitical headwinds
Economic overview
The eurozone economy continues to deliver weak, but positive growth figures, with GDP rising by 0.2% during Q3 2025. As uncertainty around global trade begins to ease, October’s EU Economic Sentiment Indicator (ESI) rose to its highest level since February 2025. Hiring sentiment remains subdued, given global geopolitical uncertainties and weaker future growth prospects.
Oxford Economics increased its 2025 eurozone GDP growth forecast to 1.3%, with growth expected to slow to 0.8% in 2026, given current weak momentum. In the UK, investors await the Autumn Budget announcement in November for clarity on future tax changes which has slowed economic momentum, whilst ongoing political instability in France is dragging back economic prospects.
2026 is expected to show less regional variation in GDP growth figures, as Germany and France recover and southern Europe’s more recent outperformance begins to normalise. The Nordics are expected to outperform in 2026, driven by expansionary fiscal policy and higher consumer spending, maintaining strong domestic demand.
Inflation in the eurozone fell by 10 basis points (bps) to 2.1% in October 2025, given energy price falls, while services inflation remains above 3%. Interest rates are expected to stay at 2.0% for an extended period in the eurozone, while Bank of England interest rates are expected to fall more slowly, by 50 bps during 2026 to 3.50%.
Occupational overview
European office take-up for Q1–Q3 2025 rose by 3% YoY. During Q3, take-up fell by 8% YoY, given tariff-related uncertainty slowing down deal completions.
Frankfurt (+76%), Dublin (+46%), Barcelona (+41%), Prague (+36%) and London City (+18%) performed strongest against their respective Q1–Q3 five-year averages, reflecting a gradual recovery in demand from the tech sector, along with resilient demand from professional and financial services. Leasing activity in Germany and France is taking longer to complete, given political uncertainty impacting weaker growth levels, which has impacted take-up levels.
Average European office vacancy rates remained at 9.3% during Q3 2025, with prime vacancy rates across many markets below the 3% mark, which is applying upward pressure on rents. On an annual basis, German and French cities report the largest increases in vacancy rates, given the slowdown in demand and recent development completions in the German cities. London City, Prague and Barcelona all reported vacancy rates falling by at least one percentage point over the last twelve months. Prime rents rose by an average of 4.9% YoY, led by the core markets of London West End (+17% YoY), Paris CBD (+13% YoY) and Frankfurt (+13% YoY).
Savills anticipates a modest increase in take-up in 2026, as occupiers resume activity despite geopolitical uncertainty. A shortage of prime CBD stock across the majority of markets will support rental growth and begin to pique developer interest during 2026.
How have we measured occupancy rates?
Savills Research has analysed office occupancy rates—based on the average number of attendees as a percentage of the office’s maximum capacity, over the course of a working week—for a sample of fully let, multi-let office buildings located in the central business district (CBD) of selected European cities. The data is based on Building Management Systems from Savills European Property Management network taken during September 2025, and attendance is based on one user’s access card per day.
What has happened to occupancy rates?
Average European office occupancy has edged up from 60% to 61% over the past year, compared to a pre-pandemic benchmark of 70%. This modest rise coincides with a growing number of corporates tightening their office attendance policies. Increasingly, consultancies, banks and investment managers are requiring employees to be in the office at least four days a week.
Which cities are leading the way?
Madrid continues to lead European office markets with an occupancy rate of 68%, driven by a high concentration of city-centre living, shorter commutes, and a strong in-office culture on peak days. In September 2025, metro usage in the city exceeded pre-pandemic levels by 8%, emphasising both commuter accessibility and enthusiasm for returning to the workplace.
London has seen a modest rise in occupancy, now at 65% in the West End and 60% in the City. While private equity firms largely maintain a five-day office schedule, most companies are targeting four days per week. Tech employees are facing growing pressure, whilst big tech employers are withdrawing their ‘work from anywhere’ policies to increase in-office presence amid softening hiring sentiment. The proportion of job postings mentioning remote/ hybrid working terms has fallen by more than one percentage point YoY across the UK, France and Germany, according to data from Indeed.
Europe’s return to office outpaces the United States (US)
Many US cities continue to see office occupancy rates below 50%, while European hubs are stabilising between 60% and 70%. Paris and London have nearly returned to pre-pandemic metro and tube ridership levels, at 96% and 93%, respectively. In contrast, Los Angeles (79%) and New York (75%) remain below their pre-Covid benchmarks, albeit increasing on an annual basis.
Commute convenience is now a necessity to attract and retain employees. Savills analysis shows that offices located just five minutes closer to major transport hubs command 6.7% higher rents on average globally, reflecting the value occupiers place on accessibility.
How does occupancy change throughout the week?
As companies increasingly refrain from assigning specific office days, mid-week occupancy spikes have become the norm. Occupancy on Tuesdays (67%), Wednesdays (65%) and Thursdays (68%) is now nearly in line with pre-pandemic levels, indicating that offices are just as busy as they once were on ‘core’ days. As such, Savills Central London occupier requirements show that occupiers are generally maintaining or increasing the level of office space across their markets.
Landlords are returning to the sector as previous concerns around office attendance dissipate. Given that Oxford Economics forecasts 605,000 net additional office-based jobs over the next five years across the EU, we believe increasing workplace attendance and office-based employment will support demand for office space in 2026.