Europe office completions to hit 13-yr low in 2011

Tue Oct 25, 2011 3:45am EDT

* 3.6 mln sq m of offices to be finished in 2011

* Finance squeeze, slow decision making may dent supply

LONDON Oct 25 (Reuters) - European office completions will fall to their lowest level in 13 years in 2011, and may only pick up in 2013, after developers delayed schemes and shelved projects during the financial crisis, research showed on Tuesday.

P roperty consultancy Jones Lang LaSalle said in its Office Property Clock report that just 3.6 million square metres of new prime and secondary office space would be completed by end -2011, the lowest level since 1998 .

The survey of 23 European countries also showed 2.3 million sq m of new office space was built in the three quarters to end-September.

"Looking forward, with the current economic uncertainty, it's increasingly unlikely that we'll see developers commence new developments and there's still restrictions to the level of development finance that is out there," JLL's Head of UK and pan-European Office Research, Bill Page, told Reuters.

While office completions were expected to pick up in 2013, with about 6 million sq m of space due, this could be dented by slow decision-making among potential occupiers, which could dissuade developers from moving ahead with projects, he added.

Issues such as the euro zone sovereign debt crisis were pushing companies to reconsider plans to move into new office skyscrapers, as in central London, CBRE said in a September report.

The CBRE report showed companies in Europe were choosing to expand into short-term space or renewing leases over moving to new offices due to the global economic malaise.

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