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Europe Office Real Estate Market Size Summary

The European office real estate market is experiencing a gradual recovery, closely tied to the region's economic resurgence post-COVID-19. Despite the pandemic's impact on work patterns, demand for office space remains robust, particularly among investors in France and Germany. The market is characterized by a significant variation in office space take-up across cities, with some like Oslo and Prague seeing increases, while others such as Dublin and Bucharest face declines due to limited quality stock. The market's fragmentation is evident, with major investment activities concentrated in key cities like Paris, London, and Germany's major urban centers. Prime office yields have adjusted, reflecting the rising costs of debt, with core markets experiencing the most significant capital value changes.

The office real estate sector continues to be a favored asset class, accounting for a substantial portion of investment volume in Europe. Rental prices for prime office spaces vary widely, with London commanding the highest rates, followed by other major cities like Paris, Milan, and Dublin. The market is poised for normalization by the end of 2023, as companies prepare to meet future demands. Key players in the market include Hochtief Aktiengesellschaft, AF Group ASA, JLL, and Cushman & Wakefield, among others. Recent strategic partnerships, such as CBRE's collaboration with Deepki and JLL's agreement with iO Partners, highlight ongoing efforts to enhance property management and expand market presence across Europe.