Labour shortages continue to impact the market and delay project completions: 21% of office stock scheduled for completion in 2025 was not achieved and has been pushed into 2026.

In 2027, the international real estate advisor anticipates that the volume of development completions will fall a further 23% YoY to 2.7m sq m, given the shortage of development starts since 2023.

Savills says that only 1.5% of the office space in the development pipeline is speculative over the next two years, down from 3.0% four years ago. Across Europe, Bucharest (3.6%), London City (3.6%) and London West End (3.2%) have the highest volume of speculative space as a proportion of total stock set to complete by end-2027.

Mike Barnes, Director, European Office Research at Savills, says: “Some bold developers are pushing ahead with schemes in the anticipation of an improving market, with higher rents and the hope of a normalised investment market with stronger pricing outcomes but, on the whole, equity remains more selective.”

Christina Sigliano, EMEA Head of Global Occupier Services at Savills, adds: “Given the volume of occupiers competing for prime, centrally-located office space, we expect prime vacancy rates across European cities will remain around the circa 2-3% level over the next few years. This will apply continued upward pressure on headline rents, creating opportunities for asset managers to turn secondary into prime.”