European office take-up weak, but occupier sentiment is starting to improve
April 15, 2021
The course of the pandemic remained the primary determinant of economic and real estate market performance in Q1 2021. A second/third wave caused the re-introduction of movement and operating restrictions in countries across Europe, leading to further contractions in GDP in Q1 and the postponement of the expected start of the recovery phase. The rollout of mass vaccination programmes begin in earnest in Q1, though multiple hurdles – from supply shortfalls, to inadequate preparation, to unexpected side effects - retarded many immunisation campaigns. A renewed wave of infections across much of the continent late in the quarter forced the imposition of stringent restrictions, highlighting the extreme uncertainty of the operating environment as well as the disparate profiles of recovery across economies. Fiscal support packages largely remained in place, alongside continued monetary policy support, preventing deeper economic scarring emerging. Although sentiment varies widely, broadly there is hope that warmer weather will coincide with accelerated vaccinations and the lifting of restrictions, heralding a much better second half of the year.