London rents aren't falling down

LONDON prime office rents have remained the most expensive in Europe, according to Knight Frank.

Knight Frank’s latest European Market Indicators show London‘s prime office rents stand at EU1,497 per sqm with prime distribution rents at EU176 per sqm. Followed by Moscow with EU1,267 per sqm and Paris with EU840.

The cheapest European city for prime office rents was Budapest with EU240 and Copenhagen with EU250 per sqm.

But Knight Frank found office leasing markets are now reaching their peak in the current rental cycle and downward pre

ssure is expected on rents in the coming months in a number of Europe’s major office markets.

The reported noted that vacancy rates have started to increase as new supply has come to the market in a number of locations.

There is also upward pressure on prime yields with markets including London, Paris and Madrid seen corrections of 100bp or more over the course of the last year while outward movements have also been recorded in Eastern Europe.

Most European cities, with the exception of Amsterdam, Brussels and Madrid have seen an increase in vacancy rates in the Q2 2008.