Stuttgart office market surprises with record result

As of 30 June 2021 the take-up figure for Stuttgart’s office market was approximately 51 000 m² and thus some 35 % lower than the previous year’s results, which were already poor. Users continue to be hesitant about leasing new premises. 

 Once again, there was a lack of major deals in the second quarter, with the letting of some 2 974 m² of office space to the State of Baden-Württemberg in the first quarter remaining the largest transaction to date. The City of Stuttgart did, however, lease 2 769 m² space in the central business district. In addition to this, Aachener Grundvermögen signed a contract with CONTORA Office Center Solutions for approximately 2 700 m² office space in a new-build development project at Königstrasse. The largest transaction in the second quarter was for around 2 694 m² space in the new “Neo” building at Vaihingen industrial park.

 Despite a decline in demand the public sector remains the strongest segment, accounting for around 18 % of total take-up. This segment was followed by the IT and Telecommunications sector (14 %) and Consultants (13 %).  In terms of location, the highest rental take-up was achieved in Stuttgart’s central business district, at around 13 800 m², and the city centre, at around 13 700 m². Demand in peripheral locations was significantly weaker.

 As of 30 June 2021 there was a total of some 256 000 m² vacant office space available at short notice, an increase of some 47 % over the comparable period in the previous year. With a total available area of approximately 8.23 million m² this represents a vacancy rate of 3.1 %. Space which was vacated by large corporations already played an important role in 2020, particularly with regard to the Leinfelden-Echterdingen submarket. Overall, there has been a slight rise in the availability of sub-let space, while the completion of some planned projects has been postponed. In the period 2021 and 2022 a completion volume of some 241 600 m² is expected, of which 74 % has already been pre-let.

 Despite the current economic challenges rents remain relatively stable. The prime rent as of  30 June was EUR 25/m while the average rent for all Stuttgart was EUR 16.30/m². Both figures are approximately 2.0 % lower than those for the previous year.

 Despite poor performance in the first half of the year a number of large-scale property searches on the market give reason to hope that annual take-up will be comparable to that of 2020. The figure as of 31 December 2020 was approximately 141 000 m².