It’s perhaps unsurprising that the cost of office spaces is on the rise, as building owners are still feeling the effects of the pandemic and a subsequent upsurge in remote working arrangements. As of 2022, office space take-up in Europe was at its lowest point since 2016.
While some businesses have been quick to encourage workers back into the office, others have championed the benefits of hybrid working, giving employees the option to divide their working week between designated office spaces and home offices.
This shift has led to many companies exploring different options for their office spaces, as they too seek to capitalise on the fact that they now need far less physical space than they might have done before the pandemic.
Intrigued by the effects that our increased interest in remote working has had on office space arrangements, we decided to find out more about what this change has meant for businesses across Europe - and how it might affect them in the future. Looking at an office space estate agent and lettings agency, we analysed the average price (€) per square metre per year of almost 1,400 office spaces in 20 of the biggest business centres across Europe.
However, as Statista declared the UK as the most expensive for office spaces back in 2019, we decided to leave London and the UK out of the research to see what other alternatives there are for employers and business owners’.
The Most Expensive European Cities for Office Space
Our research of office spaces showed that Paris, France was the most expensive city to rent office space, at €540 per sq m/year.
Parisian offices were followed by Luxembourg City, which is perhaps unsurprising given that the cost of housing in Luxembourg is 87% more than the average for the European Union.
In third place was another French city: Levallois-Perret. Not far from Paris, the city has become popular with businesses looking to access the enormous opportunities that the capital has to offer. Office space costs €374 per sq m/year in Levallois-Perret, making it more affordable than Paris itself - but still one of the priciest European cities for businesses.
The European Countries with the Most Expensive Offices
Despite being home to many of the most expensive cities for office space, France didn’t top the list of the costliest countries for businesses looking to rent offices. The winner here was Luxembourg, where office space costs an average of €427 per sq m/year. This is unsurprising given Luxembourg’s status as the second-richest country in the world. .
Second place did go to France, however, which has an average annual price tag of €344 per sq m of office space. In third place was the Netherlands. Significantly more affordable than France and Luxembourg, but still one of the priciest countries for office space rentals, the Netherlands has an average annual price tag of €255 per sq m of office space.
Cities Offering the Most Affordable Office Space in Europe
Not every city in Europe commands huge price tags for its office spaces, of course. Our research also looked into the most affordable office space locations in Europe, to see where businesses might be able to get better value for money.
Analysts found that the least expensive city for office space in 2023 was the German city of Neu-Isenburg. Here, office space costs an average of €125 per sq m/year. Affordable rental prices have led to a significant uptick in businesses basing themselves here. Notably, a number of multinational operations have settled in the city in recent years.
Second place also went to a German city. Ratingen, in North Rhine-Westphalia, was revealed as another affordable location for office space. Here, office space costs €136 per sq m/year.
Frankfurt is often thought of as the business capital of Germany, so you might expect its office space to be on the pricier side. However, our analysis showed that Frankfurt actually provides fairly affordable options for businesses. Office spaces in Frankfurt are in fact cheaper per square metre than they are in other well-known German cities like Berlin, Hamburg and Munich.
The Most Affordable Countries for Office Space
When we look at countries as a whole, the picture shifts further still. In terms of overall office space cost, the most affordable country for businesses is Czechia, where office space costs an average of €148 per sq m/year. This is closely followed by Portugal, where office space has an average annual price of €184 per sq m, and Spain, which isn’t far behind at €202 per sq m.
Germany is another relatively affordable option, which will come as no surprise as the country is home to many of the best value European cities for office space. Overall, office space in Germany sets businesses back €221 per sq m/year.
Our research found that office space in the German cities of Ratingen and Neu-Isenburg were least expensive, while Paris and Luxembourg City were home to some of the priciest office spaces in Europe.
When looking at the overall picture for different countries, however, a different picture begins to emerge. France and Luxembourg remained the most expensive European countries to rent offices, but the most affordable options became Czechia and Portugal.
Methodology: The average price per sq m/year of 1,341 office spaces in seven countries were analysed to get the overall average price in each location. The offices analysed were found on savills.co.uk.