According to the latest study by Savills , in the first half of 2026, 24% of office space lettings in Europe were in the professional and business services sector, down from 26% in 2025. Lawyers, accountants and consulting firms remained active. The share of the technology sector in total activity increased from 14% to 22%. This increase is due to both expanding AI companies and the continued activity of traditional technology companies.
The share of the banking, insurance and financial sector fell from 21% to 16%, which is in line with the long-term average. Flex offices accounted for 3% of office space demand, which is in line with the previous year's figure. Companies are looking for transitional solutions in the face of the shortage of vacant space in prime locations, with a particular preference for plug-and-play services.
The average vacancy rate for office space in Europe remained stable at 9.4% in the second quarter of 2026. Savill's latest analysis shows that the vacancy rate in CBD locations is 4.9%. In prime CBD locations, the vacancy rate is around 2%, further increasing the upward pressure on prime rents. Compared to previous cycles, the vacancy rate in CBD locations is lower, reflecting increased tenant demand for centrally located office space.
Mike Barnes, European Office Research Director at Savills, says: "In the first half of 2026, Dublin (+63%), London West End (+36%), Berlin (+30%) and Munich (+28%) saw the strongest letting activity compared to their respective five-year averages for the first half of the year. London West End benefited from brisk activity in the AI sector, while Berlin and Munich each saw large transactions by Commerzbank and JetBrains. The strong owner-occupier activity from Dublin City Council in the first quarter of 2026 has pushed the Irish capital above its historic highs."
According to the international real estate consultant, prime rents rose by an average of 3.7% in the twelve months to the end of the second quarter of 2026. Munich (+11%), Frankfurt (+10%) and Warsaw (+10%) led the development as tenants report a shortage of prime space in major cities. The weakest new construction activity in over a decade continues to underpin continued rental growth in key markets.
"Our analysis shows that average rents for prime office space in Europe have increased by 27% since the end of 2019. This is three times the average rent increase of 9% for office space in second-tier CBD locations. This is mainly due to tenants looking for higher-quality space in central locations to attract and retain employees. They are also looking to modernise their office space to reduce Scope 3 emissions," explains Christina Sigliano, EMEA Head of Global Occupier Services at Savills.
