Occupancy costs in European commercial real estate are expected to grow by two per cent year-on-year until 2015. This is according to research conducted by DTZ, which noted that rental increases will drive the rise.
Other outgoings, such as property taxes and service charges, are also set to increase, the firm's Global Occupancy Costs: Offices said.
London's West End will be the fastest growing market in Europe over the next five years. However, overall growth will be lower across Europe than will be seen globally and by 2015, occupancy costs will remain 11.7 per cent lower than at the peak in 2007.
Magali Marton, head of CEMEA Research at DTZ, added that a recovery in demand, combined with supply constraints are helping to push up rents in both London and Paris.
"We expect increasing occupancy costs across Europe to be driven by rising rents, but rental growth is underpinned by varying factors," he added. "The rebound in global production and consumer spending is driving rental growth in Eastern European office markets."