CB Richard Ellis has announced that market take-up in 2007 will be the strongest year ever for the European Technical Real Estate sector since the original telecoms buildout of the late 1990s.
Results for Quarter 3 2007 bring total market take-up for 2007 to date to 1,138,000 square feet. This represents a 140% increase on take-up for the first three quarters of 2006 (475,000 square feet). At the year's close, CB Richard Ellis predicts a million more square feet of take up in 2007 than in 2006 representing a growth of 147%, which would comfortably exceed the highest we have ever witnessed in the market since the boom and bust period.
The market in this sector remains buoyant, with a quarter-on-quarter increase in total market take-up for Quarters 1, 2 and 3. CBRE saw that this take-up across Europe was, for the first time, entirely in the Carrier Neutral Hotel (CNH) market. As a result we have seen a significant increase in CNH stock to meet the high levels of demand, and expect this to grow steadily over the coming twelve months with new schemes in the pipeline, notably in London. The third quarter of 2007 has also seen a redistribution of demand across Europe in the European Technical Real Estate market.
While London and Paris remain steady, results show that the Frankfurt market is finally coming to fruition following predicted take-up of demand in both the corporate and technology sectors and demonstrating that growth in demand is no longer solely focused in London.
Take up for Q3 in Frankfurt was as high as 2005 and 2006 combined. 2007 Q3 results indicate unlike 2006, the technology sector outperformed corporate demand as the main source of take-up. Of the total 248,000 square feet of take up across the European Technical Real Estate market, the 60% majority was in Frankfurt (149,000 square feet). Despite Frankfurt's dominance of the market in Q3, the market has also shown improvement across the continent with Paris comfortably taking third best performing market place with 15% (39,000 square feet) of total market take-up and London taking 21% (52,000 square feet) of total market take up. The remainder was made up of Amsterdam (3%) and Madrid (1%).
As for Q4 2007 and beyond, the outlook is positive with a number of deals in the pipeline for the London, Paris and Frankfurt markets. In London, a number of facilities are coming to the market which will increase the quality of the stock and bolster availability levels to appease growing demand.