Savills forecasts a 3% increase in office space take-up in European cities in 2026 compared to 2025.Despite a 10% year-on-year decline in Q4 2025 – partly due to continued occupier reluctance and geopolitical factors prolonging decision-making processes – demand volumes in the market remain high, according to Savills. Against this background, the real estate consulting firm expects a revival of rental activities in the current year. This could make 2026 the strongest year for the European office market since 2022.
According to Savills, the markets in Frankfurt (+45%) and Dublin (+40%) performed the strongest in Q4 2025 compared to their respective five-year averages. This was largely due to large-volume deals from Commerzbank and Workday. The markets in Southern Europe and Central and Eastern Europe continue to support total occupancy figures, driven by strong domestic economies and increasing activity, especially from the banking and technology sectors, over the course of the past year.
Mike Barnes, Director European Commercial Research at Savills, says: “Overall, the picture for the European office market is stable, rather positive: the purchasing managers’ index (PMI) for the service sector in the eurozone reached 51.9 in January 2026, indicating moderate economic growth. Willingness to hire reached its highest level in twelve months, while the unemployment rate in the eurozone is at a record low. These indicators, together with the low level of construction activity, are expected to increase demand for office space in the in the coming months and keep rents stable.”
By the end of 2025, prime rents for prime office space in Europe had risen by an average of 3.4%, led by London City (+18%), Frankfurt (+13%) and Munich (+7%). Budapest (+7%) and Warsaw (+6%) also recorded significant rent increases again after a period of stagnating rents, mainly due to a lack of prime office space. Savills expects prime rents to grow by an average of 3.7% in European markets in 2026, accompanied by a continued, slow decline in rental incentives. Over the course of 2025, average rent-free periods for prime office space in Europe fell from 13% to 12% of lease value, according to Savills, although they are still at historically high levels. In Oslo, Madrid and Dublin, landlords’ rental incentives also declined as the lack of new space continues to limit tenants in these markets.
“Even though user activity slowed down in the last months of 2025, we continue to observe a high number of space applications across Europe. These should lead to deals this year and thus further support the continued growth in office rents,” concludes Christina Sigliano, EMEA Head of Global Occupier Services at Savills.
The German office leasing market is likely to be characterised by similar dynamics in 2026. “The top 6 office rental markets in Germany were stable in 2025 – office space take-up was 2.8% higher than in the previous year. We expect a similar level in 2026, with more companies likely to come out of the holding pattern. Leasing will take place primarily where good accessibility and high building quality come together – this supports top rents. Peripheral sub-markets and unrenovated portfolios, on the other hand, could be more affected by the rising vacancy rate,” says Jan-Niklas Rotberg, Managing Director and Head of Office Agency Germany at Savills.
