Office letting market Hamburg 3Q2021: Great willingness to change fuels take-up of space
Hamburg / 2021-09-30
Hamburg’s office letting market is gathering momentum, as may be seen from the 3rd-quarter take-up of 135,000 m² of space. So far this year, a total of 360,000 m² of office space has been taken up in Hamburg by new tenants or owner-occupiers. This translates into growth of 44 % against the same period a year ago which was marked by the coronavirus crisis. “As a result of the pandemic, existing organization models have come under scrutiny and firms are thus very willing to explore changes. At present, the end of a rental term is frequently seen as a chance to re-organize the business and make a new start at a different location. In this respect, the recovery is reflected in the take-up of space,” says Andreas Rehberg, managing director of Grossmann & Berger, a member of German Property Partners (GPP), commenting on the growth trend. Accordingly, Rehberg expects the year to close with take-up of office space in Hamburg totalling over 460,000 m².
- The vacancy rate for office space in Hamburg stabilized at 3.8 %, slightly above the 3.3 % noted a year ago, but unchanged from the preceding quarter.
- Contrary to expectations at the beginning of the year, the take-up of sub-let space has declined since the prior quarter because many firms have opted not to let but to use the space themselves. “Most businesses with space reserves that could be sub-let are reluctant to make a hasty decision and prefer to wait and see how the situation develops. Additionally, it is often difficult to sub-let space because rental periods are limited, alterations cannot be made and no refurbishing budget is available,” says Rehberg. Nevertheless, in terms of actual figures, the amount of sub-let space has grown year on year from 30,300 m² to 48,500 m².
- Agreements to take large office suites in new-builds which command high prices have pushed the average rent to a new record figure. It increased by 4.6 % to €18.10/m²/month. The calculation is based on all agreements signed in the past twelve months. Thus the figure includes not only the new contracts for offices in the “Ipanema” and the Deelböge office campus, but also the large-volume agreement for space in the “Elbtower” concluded with Hamburg Commercial Bank in the 4th quarter of 2020.
- Year on year the premium rent climbed from €31.00/m²/month to €31.50/m²/month. “Rates have risen for top-quality office space in central locations. One of the reasons for this is the spiralling price of construction, which makes it hard for many developers to calculate project costs accurately,” says Rehberg, commenting on the increase.