Market Overview
| Study Period | 2019 - 2030 |
|---|---|
| Base Year For Estimation | 2024 |
| Forecast Data Period | 2025 - 2030 |
| Market Size (2025) | USD 377.20 Billion |
| Market Size (2030) | USD 460.12 Billion |
| Growth Rate (2025 - 2030) | 4.05% CAGR |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order Image © Mordor Intelligence. Reuse requires attribution under CC BY 4.0. |
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Europe Office Real Estate Market Analysis by Mordor Intelligence
The Europe office real estate market was valued at USD 377.20 billion in 2025 and is projected to touch USD 460.12 billion by 2030, posting a steady 4.05% CAGR(2025-2030). The expansion mirrors an industry that is reorganizing around quality, as the European Central Bank’s recent policy easing has steadied debt costs and the Bank now expects euro-area output to edge up 0.9% in 2025. Landlords gain pricing power in prime city districts because the EU Energy Performance of Buildings Directive makes zero-emission status compulsory for new stock from 2030. Germany holds the largest national slice, while younger hubs across Central and Northern Europe deliver the quickest gains. Grade A towers already dominate trading, and tenants remain willing to pay for certified space with excellent air quality and transit links. Investors continue to prefer leases for stability, yet rising appetite for disposals and brown-to-green refurbishments is lifting sales volumes.
Key Report Takeaways
- By building grade, Grade A assets captured 55.2% of Europe office real estate market share in 2024. The Europe office real estate market for Grade A stock is forecast to expand at a 4.51% CAGR between 2025-2030.
- By transaction type, the rental segment held 74.4% of the Europe office real estate market size. The Europe office real estate market for sales transactions is projected to rise at a 4.67% CAGR between 2025-2030.
- By end use, IT and ITES accounted for 31.6% of Europe office real estate market size in 2024. The Europe office real estate market for IT and ITES is advancing at a 4.89% CAGR between 2025-2030.
- By country, Germany led with a 29.1% share of the European office real estate market revenue in 2024. The Europe office real estate market for the rest of Europe is the fastest-growing region, expanding at a 5.04% CAGR between 2025-2030.
Europe Office Real Estate Market Trends and Insights
Drivers Impact Analysis
| Driver | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Growing tenant preference for energy-efficient and certified office buildings in response to evolving sustainability regulations | +1.2% | EU-wide, strongest in Germany, France, Netherlands | Medium term (2-4 years) |
| Increased leasing activity concentrated in prime urban submarkets, driven by consolidation of office footprints | +0.8% | Major cities: London, Paris, Frankfurt, Madrid, Milan | Short term (≤ 2 years) |
| Steady demand from technology, life sciences, and business services sectors supporting absorption in key cities | +0.9% | Technology hubs: Berlin, Amsterdam, Dublin, Stockholm | Medium term (2-4 years) |
| Rising interest in flexible leasing models and managed office solutions aligned with hybrid work practices | +0.6% | Global, with early adoption in UK, Germany, Netherlands | Long term (≥ 4 years) |
| Public and private incentives supporting refurbishment and green retrofit projects across legacy office stock | +0.7% | EU-wide, concentrated in major metropolitan areas | Long term (≥ 4 years) |
| Source: Mordor Intelligence | |||
Growing tenant preference for energy-efficient buildings
Three-quarters of Europe’s office blocks still perform poorly on energy metrics, yet all new buildings must be zero-emission from 2030, and public assets must reach that mark by 2028. The rule set, which also introduces renovation passports and tighter certificates, separates compliant from non-compliant stock. Companies see certified space as a recruitment tool and as proof of climate progress. As a result, certified towers achieve longer lease lengths, lower incentives, and rent premiums that often run into double digits. The divide accelerates the retirement or repurposing of older stock and cements Grade A leadership across the Europe office real estate market.
Increased leasing activity in prime urban submarkets
Financing costs dipped after the ECB’s mid-2024 cuts, and easier credit has helped lift take-up in the best addresses. EU house prices climbed 3.8% and average rents advanced 3.2% year on year in Q3 2024, pointing to concentrated demand in top locations. Hybrid schedules shrink gross footprints, yet tenants upgrade to transit-rich, ESG-ready space that keeps workers engaged. The European Investment Bank plans to steer EUR 95 billion (USD 104.84 billion) into affordable housing and urban renewal in 2025, which will reinforce supporting infrastructure. Prime districts thus retain pricing muscle while suburban vacancies rise, reinforcing the flight-to-quality trend within the Europe office real estate market.
Steady demand from technology and life-science sectors
Brussels has earmarked EUR 65 billion (USD 71.73 billion) for digital-and-green skills and framed a bloc-wide AI Act that offers legal certainty to software firms. These steps sustain expansion in tech corridors from Berlin to Dublin. A separate biotechnology roadmap underlines the need for lab-ready offices, adding depth to specialist sub-markets. While the OECD now pegs euro-area GDP growth at a moderate 1.0% for 2025[1]Laurence Boone, “OECD Economic Outlook June 2025,” OECD, oecd.org, structural talent shortages mean occupiers in these high-value industries keep searching for modern floor space. This resilience shields the Europe office real estate market from deeper cyclical swings, though sector concentration still raises exposure to tech funding cycles.
Rising interest in flexible leasing models
Forty-four million EU employees now work remotely at least part-time, and the Work-Life Balance Directive lets parents and carers request flexible schedules. Demand for managed suites has therefore moved beyond start-ups. Operators and owners increasingly sign management agreements that share the income risk. German cities absorbed 56,000 m² of flex space in 2023, equal to 2.7% of total office take-up, with daily desk prices ranging from EUR 245 (USD 270.39) to EUR 450 (USD 496.63). The rise of short, service-rich contracts prompts landlords to redesign floors and adopt digital access systems that track occupancy in real time.
Restraints Impact Analysis
| Restraint | (~) % Impact on CAGR Forecast | Geographic Relevance | Impact Timeline |
|---|---|---|---|
| Elevated financing and construction costs delaying new developments and major refurbishments | −0.9% | EU-wide; particularly Germany, France, UK | Short term (≤ 2 years) |
| Reduced long-term space requirements due to hybrid work policies among large occupiers | −0.7% | Major metropolitan areas across Europe | Medium term (2-4 years) |
| Limited investor appetite for non-compliant or low-grade assets, increasing the risk of asset obsolescence | −0.5% | EU-wide; concentrated in secondary markets | Long term (≥ 4 years) |
| Source: Mordor Intelligence | |||
Elevated financing and construction costs
Eurostat’s producer-price gauge for construction has risen steadily since 2021, reflecting dearer cement, steel, and labor. The ECB still flags tight lending margins for development loans, even after recent policy cuts. Industry body FIEC expects the continent’s build-rate to contract 2.3% in 2024 and warns that housebuilding alone may shrink a further 8.6%. Scarcer credit and pricier materials force many sponsors to defer projects, reducing the future supply of smart, efficient offices. Short supply supports rent growth but limits the overall capacity of the Europe office real estate market.
Reduced long-term space requirements
Almost one in three EU professionals now works remotely at least a day a week, and occupiers continue to cut unused square meters[2]Riccardo Viaggi, “European Construction Outlook 2024,” CECE (Committee for European Construction Equipment), cece.eu. The ECB’s latest stability review links this behavioral change to an 8.7% annual fall in office values in 2023. ESMA notes that open-ended property funds face redemption risks as investors digest new use patterns[3]Anne Mertens, “Construction Producer Price Index Methodology Note,” Eurostat, ec.europa.eu. The upshot is weaker absorption in peripheral districts, though downtown towers still benefit as firms reinvest savings from downsizing into upgraded amenities.
Segment Analysis
By Building Grade: Premium assets command market leadership
Grade A stock accounted for 55.2% of Europe office real estate market value in 2024 and should climb at a 4.51% CAGR to 2030. Investors favor these towers because they already comply with Minimum Energy Performance Standards and often boast in-place green-power contracts. Certified space trades at yields up to 50 basis points sharper than older blocks, yet spreads still compensate for retrofit costs. Grade B owners confront a choice: fund heavy upgrades or accept rising vacancy. Grade C remains the refuge of cost-sensitive tenants, but looming carbon penalties erode its price advantage. The policy backdrop, therefore, reinforces a two-tier structure inside the Europe office real estate market.
Remodeling momentum has sparked record sustainability-linked lending, with banks offering margin discounts once energy targets are met. Developers also tap EU Green Bonds to unlock cheaper capital. As a result, the pipeline of repositioning schemes has swelled, especially in Berlin and Paris, where project volumes jumped 18% in 2024. The shift favors contractors versed in net-zero systems and digital twin modelling. These trends appear durable and will keep Grade A at the top of the Europe office real estate market share table through 2030.
Note: Segment shares of all individual segments available upon report purchase
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By Transaction Type: Rental dominance with sales acceleration
Leases still make up 74.4% of total turnover, reflecting the preference for predictable cash flow. Hybrid contracts that embed break options and co-working clauses have become standard. At the same time, sales volumes are rebounding from the 2023 slump. The ECB’s easing cycle and a clearer path for valuations have nudged capital back into the sector. Sale-leasebacks gained traction as corporations unlocked trapped equity without losing operational control. These moves helped push direct-investment transactions up by 13% during 2025. The momentum is forecast to take outright purchases close to USD 120 billion by the end of the outlook window, supporting wider liquidity in the Europe office real estate market.
Private-equity groups target distressed secondary blocks, aiming to refurbish and sell them into the Grade A pool. Listed REITs, meanwhile, recycle capital by divesting suburban holdings and reinvesting in flagship CBD towers. The pattern broadens the buyer mix and reduces reliance on bank funding. With sovereign-wealth and insurance money also returning, bid-ask spreads have narrowed to pre-pandemic levels in many core cities. Higher turnover, therefore, complements rental cash flows and deepens the resilience of the Europe office real estate industry.
By End Use: Technology sector leadership drives innovation
Tech firms held 31.6% of floor area in 2024 and will extend that lead thanks to EU programs that inject funds into AI, cybersecurity, and cloud services. The segment’s 4.89% CAGR outpaces the overall Europe office real estate market. These occupiers demand floorplates with fiber redundancy, raised floors, and collaboration zones, prompting landlords to adopt modular layouts. BFSI tenants rank second and keep seeking prestige addresses to satisfy regulatory and client expectations. Professional-service partnerships lease mid-sized suites but drive high footfall, boosting on-site amenity demand.
Life-science players dominate a rising share of the Other Services bucket as pharma and biotech scale their R&D spend. Their labs require extra air-changes and vibration control, supporting rent premiums that can exceed 25% over standard office. Retail head offices and energy companies round out the mix, smoothing cyclical swings. This broadened base means the Europe office real estate market is not overly dependent on any single industry, though tech’s design preferences continue to shape building specs across all use cases.
Note: Segment shares of all individual segments available upon report purchase
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By Country: German leadership with emerging-market acceleration
Germany retained 29% of regional value in 2024 and remains the benchmark for lending terms and valuation metrics. Frankfurt benefits from post-Brexit bank relocations. Munich leverages its deep engineering base, while Berlin captures venture funding. Together they deliver a balanced demand profile that anchors the Europe office real estate market size.
Rest-of-Europe markets, covering the Nordics and Central Europe, record the fastest expansion at 5.04% CAGR. Stockholm and Amsterdam attract cloud providers with competitive power tariffs and reliable grids. Dublin offers an English-speaking gateway and favorable tax treatment. Warsaw and Prague supply skilled programmers at lower cost, pulling satellite offices from multinational groups. The UK, France, Italy, and Spain advance at mid-single-digit rates on the back of policy stability and infrastructure upgrades funded by EU and national programs.
Geography Analysis
Germany retained 29.1% of regional value in 2024 and remains the benchmark for lending terms and valuation metrics. Frankfurt benefits from post-Brexit bank relocations. Munich leverages its deep engineering base, while Berlin captures venture funding. Together, they deliver a balanced demand profile that anchors the European office real estate market size.
Rest-of-Europe markets, covering the Nordics and Central Europe, record the fastest expansion at 5.04% CAGR. Stockholm and Amsterdam attract cloud providers with competitive power tariffs and reliable grids. Dublin offers an English-speaking gateway and favorable tax treatment. Warsaw and Prague supply skilled programmers at a lower cost, pulling satellite offices from multinational groups. The UK, France, Italy, and Spain advance at mid-single-digit rates on the back of policy stability and infrastructure upgrades funded by EU and national programs.
Milan and Madrid offer moderate costs and strong lifestyle appeal that help attract creative and professional-service occupiers. Each of these markets faces tighter EPC hurdles, yet established landlords were early adopters of green retrofits and thus remain competitive. NextGenerationEU grants are rebuilding transport links and digital backbones, which in turn shorten delivery times for new offices. Institutional investors increasingly split allocations between gateway markets and these growth cities to capture both yield and diversification. The pattern broadens the spatial footprint of the European office real estate market and spreads refurbishment know-how across the continent.
Competitive Landscape
The Europe office real estate market is moderately concentrated. The largest real estate investment trusts and sovereign-backed funds dominate a significant share of prime central business district (CBD) towers. Their scale enables them to secure more favorable retrofit contracts and lead the adoption of smart-building technologies that track carbon emissions, temperature, and occupancy patterns in real time. Mid-sized landlords tend to focus on value-add opportunities, while smaller local developers often pursue boutique refurbishment projects aimed at attracting tenants from sectors like legal services and the creative industries.
Technology adoption marks a growing divide. Early movers install occupancy sensors, touchless access, and AI-driven maintenance that cuts operating costs by up to 15%. Those features attract ESG-focused tenants and unlock green-bond financing. Institutional investors increasingly screen acquisitions for digital readiness as well as EPC ratings. Players lacking scale or capital risk marginalization, especially once full Scope-3 reporting comes into force.
Flexible-space operators act as disruptors by signing management deals that offload day-to-day running from owners while keeping fit-out investment light. Their presence helps large landlords activate underused ground floors and amenity zones. Meanwhile, the EIB’s growing share of sustainability lending supports owner-occupier retrofits, allowing corporates to upgrade HQs without diverting cash from core operations. Ongoing consolidation will likely lift the combined share of the five biggest landlords to near 50% by 2030, yet local specialists will endure where they can deliver niche layouts or heritage locations.
Europe Office Real Estate Industry Leaders
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Jones Lang LaSalle IP, Inc.
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CBRE
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Cushman & Wakefield
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Savills
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Colliers
- *Disclaimer: Major Players sorted in no particular order
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Recent Industry Developments
- June 2025: Colliers announced a definitive agreement to acquire a controlling interest in Astris Infrastructure, LLC, a global investment-banking firm specializing in infrastructure and energy transition, with closing expected in Q3 2025, complementing its USD 25 billion infrastructure asset-management business.
- May 2025: Gecina signed a preliminary agreement to acquire a 32,200 m² office complex in Paris’ CBD for EUR 435 million (USD 499.0 million) from Deka Immobilien, including the vacant “Rocher” building and fully let “Hôtel Particulier,” with EUR 30–40 million (USD 34.4–45.9 million) reserved for refurbishment.
- April 2025: Hines entered Sweden’s residential sector by forward funding 310 rental apartments in Kista, Stockholm, strengthening its Nordic platform.
- March 2025: SEGRO and Pure Data Centres Group formed a JV to develop a GBP 1 billion (USD 1.35 billion) fully fitted data center in Park Royal, London, with SEGRO injecting around GBP 150 million (USD 202.8 million) of cash equity and anticipating a 9–10% net yield.
Research Methodology Framework and Report Scope
Market Definitions and Key Coverage
Our study defines the European office real estate market as the total capital value of income-producing and owner-occupied office buildings that are transacted for lease or sale across EU-27, the U.K., Norway, Switzerland, and other continental hubs. Stock under construction is counted once a completion certificate is issued, whereas coworking licenses, serviced-office fees, and property-management revenues are excluded.
Scope exclusion: pure land banks, student housing, and mixed-use assets where offices account for under 50% of net lettable area are left outside the model.
Segmentation Overview
- By Building Grade
- Grade A
- Grade B
- Grade C
- By Transaction Type
- Rental
- Sales
- By End Use
- Information Technology (IT and ITES)
- BFSI (Banking, Financial Services and Insurance)
- Business Consulting and Professional Services
- Other Services (Retail, Lifescience, Energy, Legal)
- By Country
- Germany
- UK
- France
- Italy
- Spain
- Rest of Europe
Detailed Research Methodology and Data Validation
Primary Research
Interviews with leasing brokers, valuation surveyors, lenders, and large occupiers across Germany, France, the Nordics, and CEE test supply pipelines, achievable rents, and retrofit premiums. Online surveys with facilities heads validate vacancy thresholds that trigger relocations, letting us fine-tune absorption assumptions.
Desk Research
Mordor analysts start with authoritative public statistics from Eurostat, national land registries, the ECB's commercial property price index, and customs data on construction materials. These baselines are enriched with industry associations such as EPRA, RICS, and BPF, as well as peer-reviewed journals tracking energy-efficient retrofits. Company 10-Ks, REIT filings, and reputable news feeds through Dow Jones Factiva give transaction color and forward guidance. Paid databases, D&B Hoovers for landlord financials and Questel for refurbishment-related patents, help us benchmark refurbishment cost curves. This list is illustrative; many further references support data capture and cross-checks.
Market-Sizing & Forecasting
A top-down stock-value reconstruction from national accounts is paired once with sampled asset-level roll-ups for Grade A clusters to ground the estimate. Key drivers fed into the model include net absorption, average prime rent, yield compression trajectories, EPC-linked cap-ex, and demolition ratios. Forecasts to 2030 rely on a multivariate regression of GDP growth, office-based employment, and ECB policy rates, refined through scenario analysis where experts diverge. Where city-level bottom-up tallies fall short of national totals, gap shares are apportioned using historical leasing flow weights before final reconciliation.
Data Validation & Update Cycle
Outputs pass three-layer checks: algorithmic variance flags, senior analyst peer review, and a quarterly re-contact of panel experts for material events. Reports refresh annually, and a final pre-publication sweep ensures clients receive the latest calibrated view.
Why Mordor's Europe Office Real Estate Baseline Earns Board-Room Trust
Published numbers often disagree because firms mix stock value with annual investment flows or bundle flex workspace fees into real estate revenue. Scope boundaries, currency bases, and refresh cadence amplify gaps.
Key gap drivers include (i) alternate studies treating every standing structure, including half-vacant suburban blocks, as fully valued stock, and (ii) flow-based reports quoting only one-year transaction volumes, thereby missing latent capital value swings when debt costs shift.
Benchmark comparison
| Market Size | Anonymized source | Primary gap driver |
|---|---|---|
| USD 377.2 bn (2025) | Mordor Intelligence | - |
| €1.2 tn (2024) | Regional Consultancy A | Counts entire stock irrespective of occupancy and quality; omits country-level retrofit write-downs |
| €93 bn (2022) | Trade Journal B | Measures annual deals only; excludes owner-occupied assets and untapped debt-funded refurbishments |
These contrasts show that Mordor's disciplined scope setting, mixed modelling logic, and yearly refresh deliver a balanced, transparent baseline clients can rely on for capital planning.
The present study sizes the 2025 market at USD 377.2 billion. Regional Consultancy A reports roughly €1.2 trillion for 2024. Trade Journal B cites €93 billion of 2022 office transactions.
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Key Questions Answered in the Report
What is the current value of the Europe office real estate market?
The Europe office real estate market was valued at USD 377.20 billion in 2025 and is projected to reach USD 460.12 billion by 2030.
Which country holds the largest share of the market?
Germany leads with 29.1% of Europe office real estate market share, supported by diversified demand in Frankfurt, Munich, and Berlin.
What segment is growing the fastest?
Sales transactions exhibit the highest growth, advancing at a 4.67% CAGR as investors capitalize on corrected valuations.
How do ESG regulations affect office values?
Buildings that fail to meet the Energy Performance of Buildings Directive increasingly trade at brown discounts, while certified assets command rent premiums and lower vacancy.
Why are technology companies critical to office demand?
IT & ITES occupiers account for 31.6% of spending and are forecast to grow at 4.89% CAGR, anchoring demand for highly connected, amenity-rich space in prime urban hubs.
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