Market at a glance
Demand for office space remained strong at mid-year, resulting in a new record high of 1,870,400 sqm in Germany’s Big 7. H1 take-up surpassed the previous year’s solid result by 6% and the 10-year average by 24%. The office leasing market remained stable in the face of current global economic forecast.
The vacancy rate in the Big 7 fell to 3.0% for the first time. The development pipeline is growing as a result, with 1.6 million sqm of office space scheduled for completion in 2019 and almost 5.3 million sqm by 2021. The Berlin and Munich markets are particularly booming. Pre-leasing rates remain high, with 61% of developments scheduled for completion through 2021 pre-let.
As a result, prime and average rents continued to rise at mid-year with some local differences. In light of a strong H1, we are increasing our expectations for annual 2019 results to 3.7 million sqm. With demand still high, new-build space will quickly be absorbed by the market.