Top-7-office markets Q1/2021: Between boom and bust

Hamburg, 07.04.2021Press release

Take-up of office space top-7-cities Germany Q1/2021_Source: German Property Partners (GPP)

 

At the close of the 1st quarter of 2021, despite the many uncertainties, take-up of office space in Germany’s top 7 cities remained stable, posting year on year growth of 1 %. A total of 655,300 m² of office space was taken in Hamburg, Berlin, Düsseldorf, Cologne, Frankfurt, Stuttgart and Munich. “It would seem that following the boom years between 2016 and 2019 take-up of office space in the top 7 cities is now settling at a low level,” says Oliver Schön spokesperson for German Property Partners (GPP) commenting on the data collected by the partners. Partner firms in the GPP commercial property network are Grossmann & Berger, Anteon Immobilien, GREIF & CONTZEN Immobilien, blackolive and E & G Real Estate.

 

VAST DIFFERENCES IN TAKE-UP FIGURES  

1st quarter take-up of space in the top 7 locations varied enormously from city to city: whereas take-up in Munich and Düsseldorf was halved, in Cologne it doubled. “In both Munich and Düsseldorf clients were particularly hesitant and are postponing decisions until the third or fourth quarter. Neither city posted a single agreement for office suites measuring more than 5,000 square metres,” adds Schön. “By contrast in Cologne three Federal agencies signed contracts for premises offering between 5,000 and 13,000 square metres of office space. Local government/public corporations were thus behind more than 40 per cent of take-up in this city on the Rhine”. The public sector was also a major driver of demand in Stuttgart (28 %) and Hamburg (18 %), although not quite to the extent seen in Cologne.

 

THERE IS NOT A GLUT OF SPACE 

As expected, the amount of office space available at short notice has increased in all top 7 cities. Overall the rise was moderate, ranging between +0.4 percentage points in Düsseldorf and +1.6 percentage points in Frankfurt. Compared with past history, the increase was relatively high in the financial centre Frankfurt. This was because empty space had reached an all-time low in the same period a year before and appreciably more new-build space came onto the market in 2020. Frankfurt thus posted the highest vacancy rate at 8.3 %. Within the space of one year the vacancy rate across all top 7 cities rose from 2.9 % to 4.0 %.

“As yet it is not clear what role sub-let space will play in the further course of the year,” says Schön. In all the cities, apart from Cologne, the range of variation in average and premium rents is already far narrower than in previous years. For example, letting very large amounts of space to the public sector, which is not subject to VAT, had an adverse impact on nominal rents and pushed the average rent in the cathedral city of Cologne to €17.50/m²/month. Compared with the relatively low value seen a year ago, this is equivalent to growth of 17 %. 

 

OPTIMISTIC VIEW OF THE YEAR AHEAD 

Despite the uncertain economic prospects the office-block building boom in the top 7 cities will continue practically unabated this year and in 2022. The volume of completions in the top 7 cities totals 3.36 million m² in 2021 and 2022.  57 % of the space has already been let off-plan, a year on year increase of four percentage points. “The cautious optimism at the end of last year was justified. Instead of being subject to a dominant overall trend on the market, the cities are developing in very different ways, depending on their industrial mix and sub-markets. At present some clients are seeking large amounts of space and some firms are waiting until they know how they stand on the market. Due to upheavals in the way people work, it is likely that the overall take-up of space in the top 7 cities will fall well below pre-2019 levels”, forecasts Schön.


Major known agreements for 5,000 m² or more | Top 7 locations | 1st quarter 2021

City 

Project/property 

Tenant/owner-occupier 

Rental area (ca. m²) 

BER

“Upbeat”, Heidestrasse

DKB Bank

34,850

FFM

“The Move Blue”, Gateway Gardens,

De-Saint-Exupèry-Strasse 3, 5-7

Siemens (owner-occupier

15,000

CGN

Josef-Lammerting-Allee 24-34

Federal agency

13,000

BER

“Shed”, Sonnenallee 221

SRH Berlin University of Applied Sciences

13,000

CGN

“Ovum”, Stolberger Strasse

“BIMA” for a Federal agency

12,000

HAM

“denk.mal Hannoverscher Bahnhof”,
Am Lohsepark 67-69

Wintershall Dea

11,350

BER

Rohrdamm 22

Hochschule der Bundesrentenanstalt (Fed. univ.)

10,315

HAM

“Oval Office”, Überseering 10

Deutsche Bank

9,600

FFM

“Palazzo Fiorentino”, Gerbermühlstrasse 3-5

Municipal unit

7,600

FFM

Solmsstrasse 16-22

Mainova

6,900

CGN

Edmund-Rumpler-Strasse 6

Federal agency

5,000

Source: German Property Partners (GPP)

 

Top 7 cities | 1st quarter of 2021

 

HAM 

BER 

DUS 

CGN 

FFM 

STU 

MUC 

Top 7 

Take-up of space 

in m² 

130,000

160,000

50,600

85,000

96,200

33,000

100,500

655,300 

Change 

against prior yr in % 

+37

+45

-51

+113

+34

+3

-48

+1 

Premium rent 

in €/m²/month 

31.00

39.00

28.50

26.00

45.00

25.00

38.25

- 

Average rent [€/m²/month] 

17.90

28.00 

16.90

17.50

21.10

16.40

21.40

- 

Stock of office space in millions m²

13.95

20.15

7.30

8.00

11.64

8.17

23.33 

92.54 

Vacant space incl. sub-let space [m²] 

524,100

470,000

536,000

235,000

967,200 

249,400

740,000

3,721,700 

Vacancy rate incl. sub-let space [%] 

3.8

2.3

7.3

2.9

8.3 

3.1

3.2

4.0 

Completions 

2021 + 2022 in m²

333,000

1,221,000

234,000

200,000

487,700

236,000

645,000

3,357,000

Pre-letting ratios 2021 + 2022 in %

70

48

68

50

52

73

62

57

 Source: German Property Partners (GPP)

 

The complete GPP market survey is available for download.

Press contact


Berit Friedrich

Hamburg
Bleichenbrücke 9
20354 Hamburg
Phone +49 (0)40/350 80 2-620 (Stadthöfe)
Fax +49 (0)40/350 80 2-200
Email presse@germanpropertypartners.de
Internet www.grossmann-berger.de