Prime office market rebounds across Europe as return-to-office gains momentum 

The prime office sector in London and other major European cities is experiencing a pronounced and sustained recovery, marked by a sharp uptick in leasing activity, declining vacancy rates, and a resurgence in investor confidence. Recent market data indicates that prime office rents have risen between 5% and 12% year-over-year in leading markets such as London (+9.7%), Paris, and Munich, highlighting the strong return of demand for high-quality, centrally located workspaces. 

According to new figures released by commercial real estate firms JLL and Cushman & Wakefield, total office take-up across 18 key European markets reached 1.99 million square meters in the first quarter of 2025. This represents an 8% increase compared to the same period in 2024 and brings the market in line with its five-year average. The growth marks a notable turnaround after several years of underwhelming performance in the wake of the COVID-19 pandemic and its widespread disruption of office use. 

“There’s been a clear flight to quality,” said a real estate analyst at JLL. “Occupiers are prioritizing top-tier, eco-certified buildings in accessible locations, especially those along transit-rich corridors like the Elizabeth Line.” 

This flight to quality is shaping the leasing strategies of many occupiers, particularly multinational firms and financial services companies. These tenants are focusing on sustainable buildings with strong ESG (environmental, social, and governance) credentials, advanced HVAC systems, flexible layouts, and integrated wellness features-all of which are becoming standard requirements for modern office environments. 

European markets show parallel momentum

Other major European cities are seeing similar trends, particularly Paris and Munich. In Paris, prime office rents rose by approximately 12% year-over-year, while in Munich they increased by about 6%. In both cities, occupancy rates have also improved. The demand for centrally located, high-specification offices continues to exceed available supply, putting upward pressure on rents and limiting options for space-hungry tenants. 

Paris’s central business districts, such as the 8th arrondissement and La Défense, are experiencing strong leasing momentum. Meanwhile, in Munich, areas near key transit hubs and innovation clusters are attracting interest from both domestic and international companies. In both markets, the imbalance between supply and demand for Grade A office space is likely to persist in the near term. 

The inflow of capital is especially pronounced in core markets like Berlin, Frankfurt, and London, where well-located buildings with long-term leases and strong tenant covenants are viewed as relatively safe bets. Forward-funding deals and refurbishments of aging stock into ESG-compliant buildings are also becoming more common. 

This division is creating pressure on landlords with older, less energy-efficient properties. Many are now considering significant refurbishments or repositioning strategies to stay competitive. Buildings that cannot meet stricter regulatory and tenant standards risk becoming stranded assets, a growing concern in cities tightening their energy performance benchmarks. 

Additionally, macroeconomic factors such as stable interest rates, gradually improving inflation data, and clearer monetary policy direction from the European Central Bank and the Bank of England are all contributing to increased confidence in the sector. The balance of power is tilting once again toward landlords–at least in prime locations. 

The European prime office market is showing encouraging signs of a robust recovery. While challenges remain in secondary locations, the broader picture is one of growing momentum, renewed investor activity, and a recalibrated focus on quality and sustainability. As hybrid work models mature and business confidence stabilises, the region’s top office markets appear poised to enter a new phase of growth and resilience.