Vacancy, which has shown a downward trend since the end of the 2001, was up almost a full percentage point during the quarter due to a combination of lower demand and a relatively-high amount of new space hitting the market, the report said.

"This increase was due to the very high quarterly level of office completions. Since office absorption reached a level of less than half of the completed space, the total amount of vacant space increased by some 31,000 square meters (sqm), totaling at little over 210,000 sqm at the end of Q1," CBRE analysts wrote.

Gross take-up of office space stood at 35,100 sqm in Q1, representing a decrease in volume of leases signed by 34% on the quarter and 37% on the year. In terms of net absorption, the Q1 figure surpassed the Q4 2005 level by nearly 10%, reaching some 25,000 sqm.

"The office market performed rather modestly in terms of demand, when compared to both the previous quarter and the same period a year before," the report stated.

Based on the letting transactions concluded in Q1 2006, the average quoting rent shifted slightly downwards to EUR 12.9 per sqm per month from the EUR 13.0 level of Q4 2005 and EUR 16.50 one year ago.