LONDON-Signs of a turning point in Europe’s office sector were evident in first quarter, says realtor CB Richard Ellis. Its EU-27 office rent index registered a 1% rise after 18 months of decline, largely the result of the first genuine expansion signs in London and Paris. But rental growth is likely to become more widespread as other markets strengthen across Europe.

“The severe slowdown in office leasing activity which characterised 2009 appears to be easing across Europe. However most markets continue to be driven by a large number of small and medium-sized deals,” said Richard Holberton, CBRE Director of EMEA Research.

Office vacancy continues to rise but the rate of increase is slowing. Further rises are expected in aggregate as the overhang of development completions, started before the downturn, comes to a close. However, vacancy is considered to be close to its peak or already beginning to fall in key markets, with demand expected to stabilise or improve slightly this year, accompanied by a reduction in development completions throughout 2010 and 2011. Yet this scenario has the potential to change as more markets stabilise.