August 5, 2013, Munich – The results for the office leasing market and for commercial investment during the first sixth months of the year exhibited very different tendencies. While clients interested in leasing office space were more reticent than in the previous year, the trend on the investment market was clearly upwards.
Germany’s office tenants exercise restraint during first half of year – Owner-occupiers bolster take-up results
The take-up of space, which was only 2 % below that of the previous year, was primarily supported by owner-occupiers during the first half of 2013. The take-up resulting solely from leasing activity declined markedly with a loss of 9 %. The reason for this can be seen in the noticeably lower volume of new office space being sought since the end of 2012. The fact that the vacancy rate also declined was – and still is – a result of the ongoing low volume of completions accompanied by simultaneously high rates of pre-letting. Our forecast for the second half of the year is guarded, even though the figures for the office space being sought in the larger floor space segment are also slowly increasing again.
Pace of German commercial investment market picks up – Transaction volume 39% higher than previous year’s level
The picture we see on the commercial investment market is a different one. There the transaction volume at the end of the first half was markedly higher, representing a 39 % increase in relation to same period 12 months earlier. Germany has been benefiting considerably from the continuation of low interest rates and the persistent demand for core properties in excess of supply. Since the sales pipeline is well-filled and investors have the greatest faith in Germany, along with Great Britain, in relation to all the other countries in the EMEA region, we consider an overall transaction volume of over €25 billion to be realistic for Germany.
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