According to Jones Lang LaSalle, the trend of the Milan office market has differed in some fundamental aspects from the forecasts made. The start of 2002 was characterized by the caution of users, in a still uncertain economic climate which pushed companies to postpone their decision-making activity towards the middle of the year, in conjunction with the expected recovery of the economy. The further decline in the absorption rate is a direct consequence of this, marking a negative difference of 30% compared to the 4th quarter of 2001 and 60% compared to the 1st quarter of 2001. The limited number of large surface transactions however contributed to the decline, in fact in the 1st quarter only two involved a surface area exceeding 10,000 m2. On the contrary, the percentage of absorption represented by pre-leasing activity remained high and with approximately 26,000 m2 (three transactions) it represents just over half of the total volume recorded. Despite the aforementioned slowdown, today's active demand for offices remains promising, still leaving us to foresee the possibility of reaching an absorption volume almost in line with 2001 (around 400,000 m2). The activity of end users has been rather limited to date, but nevertheless the vacancy rate has remained unchanged compared to the last quarter of 2001, with a total volume estimated at approximately 460,000 m2. The invariance is the result both of the failure to place new or renovated products on the market during the 1st quarter and of the exchange phenomenon, users who have moved their offices to spaces of almost similar size but of better quality, leaving the previously occupied solutions vacant. The total stock of office space is estimated at approximately 11 million m2 and the current vacancy rate is around 4.2%. Almost 50% of the vacancy is represented by category C spaces, being offices of poor quality standards and inadequate to satisfy the needs of end users, therefore not absorbable by the market unless following renovation and/or adaptation interventions.
source: from Osservatorio Immobiliare
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