“The lack of owner-occupiers obstructs the view on the fact that the pure leasing market is recovering. However, there can be no talk of a boom. For instance no large-scale lettings of over 5,000 m² were recorded during the 2nd and 3rd quarter.” states Peter Bigelmaier, head of Office Letting at Colliers International. The market has been supported by leases between 2,001 and 5,000 m² although they only played a minor role in turnover last year. Lease contracts for more than 88,600 m² were concluded in this size segment. The small-sized segment (up to 500 m²) followed closely with 87,200 m², which is nearly 10% less than in the comparison period.
A change of guard took place in the distribution of the business sectors. Manufacturing companies let 74,100 m² and were just in front of IT and consulting sectors. They both outperformed the new market leader in regard to the number of closed lease contracts; however, the average size of the contracts was considerably smaller in terms of the turnover which accounts for their ranking position.
Office space vacancy continued to drop and reached its lowest level in 10 years which is currently at 5.5%. Particularly the stagnant small number of building completions accounted for only 1.26 million m², which will be available for rent within a short period of time. Within the city area alone (excluding the suburbs) the vacancy rate is even lower at 4.8%. This is also due to the current increase in renovations of older buildings, which are temporarily not considered as vacant space.
The average rent price increased by roughly 5% in the annual comparison and amounts to € 15.59/m². Compared with the previous quarter this is a slight drop, however, considering the long-term development still it can be described as a sound upward trend. The same applies to the prime rent meanwhile ranging at € 34.80 m² or 8% above last year’s results. High-quality properties in top locations are still in demand which - as a consequence of shortage - leads to increasing rent prices.
Although many economists made optimistic forecasts of the macroeconomic development which turned out to be too high, this usually has only delayed affects on the office markets. “According to experience there will be a final rush in the last quarter, and there are also some larger lease contracts in line which are expected to be signed during the course of the coming months. Therefore the total turnover of 555,000 m² excluding owner-occupiers, which we forecasted as annual result already at the beginning of the year, is ambitious from today’s perspective, but it is still possible.” Peter Bigelmaier