JLL Office Property Clock Q4 2019
Strong occupier demand pushes European take up to record Q4 activity
JLL’s latest European Office Property Clock shows record Q4 occupier demand.
The pace of economic activity in Europe continued to soften at the back end of 2019. Consumer confidence deteriorated across the region, but with strong fundamentals still in place – such as high employment, low unemployment, and positive real wage growth – retail spending growth has continued to hold up. Industrial sentiment and activity worsened further, with the manufacturing PMIs slipping further above the 50-mark that separates expansion from contraction. Germany, where industry has been in recession for over a year, saw the pace of decline ease, possibly indicating an approaching nadir in the industrial downturn. Positively, the previous softening in services sector activity reversed in December and sentiment among services-oriented businesses picked up. The political backdrop remained volatile throughout the quarter, capping a frenetic year. Looking ahead to 2020, we can expect a similarly challenging year, with continued political uncertainty and some increased economic pressure. Nevertheless, the outlook for the European office market still looks promising as unemployment continues to fall, and we expect rental growth to outperform the 10-year average