The latest report from Cushman & Wakefield says the European office market is recovering after spending some time as the 'outcast' of real estate markets. And rising demand for Grade A office space is making upgrades to secondary spaces an opportunity for investors.

In Europe economic recovery, urban regeneration and evolving work trends are creating new opportunities for office investment. The return-to-office momentum is gaining ground and the long-term value of strategically located assets is becoming clearer.

C&W state that office attendance is above 70% in 2024, up from 60% in 2023. Average lease duration has also recovered to pre-pandemic levels. London has seen the slowest return-to-office compared to European counterparts, but C&W spots rising levels of office attendance.

One important trend underway is that given the lack of Grade A space options, particularly the size of requirement occupiers require, available for lease, occupiers are increasingly turning to secondary spaces to secure desirable locations. The report also highlights the importance of energy efficiency in today's office buildings. They also need to be "equipped to support modern business needs".

As demand spills over into secondary stock, evidenced by a 9% quarter-on-quarter increase in take-up in Q4 2024 across Europe, landlords may find opportunities to enhance assets through repositioning strategies. 

C&W's recommendations for investors are the they should leverage demand for high-quality office space, including upgrading existing properties to meet the rising demand for "energy efficient, flexible and well-located office spaces".

Download the full report here: https://www.cushmanwakefield.com/en/insights/is-emea-office-investment-sector-primed-for-a-comeback