Time to Define Prime A contested term within Western European Office Lease Practice

Lesley Atkinson-Baldwyn, Sarah Sayce and Judy Smith

ERES from European Real Estate Society (ERES)

Abstract: This paper addresses the issue of defining prime offices within the context of three European countries. In so doing, it draws from literature, a recent survey of European lease practices (Atkinson-Baldwyn, 2011), and a desktop study of the current usage of the term in London, Paris and Frankfurt. The paper will demonstrate that, whilst the term prime is used frequently, it is used imprecisely and without shared understanding. The disparate usage in existing literature, explored in the paper, is indicative of the different criteria employed. The findings of a wide-ranging study of lease practices within three Western European capitals reinforced the apparent lack of agreement over a definition. This calls into question the use of prime when applied in comparative analysis. Further, the use of the term may also be affected by the property cycle, as position within the economic cycle affects what researchers and investors regard as prime property. This paper argues the need for general understanding of the term prime in the office markets of Western Europe and the requirement to develop a common framework. Findings There is apparent concensus regarding the difficulties involved in creating a standard definition of a prime office for Europe. Differences include the influence of culture, climate, local working practice and economic maturity. Additionally, lack of shared understanding of sustainability factors and their contribution to the definition of sustainable buildings further reinforces the differences. For example the market requirements for a prime office of air conditioning or grey water re-cycling may relate to country-specific regulatory environments or local adoption of ëgreení technologies. The effect of sustainability factors may have increased in importance within notions of prime due to wider corporate cognisance of broader social responsibility and the triple bottom line of economic, environmental and social sustainability, which have been argued to impact on building choice decisions. The paper concludes that a shared understanding of prime within local or convergent European markets will assist appropriate analysis and aid transparency within the operation of commercial letting and sales markets.

JEL-codes: R3 (search for similar items in EconPapers)
Date: 2011-01-01
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