Office market top-7 3Q2018

Berlin posts biggest rise in rents

Press release | Hamburg

At the end of the first three quarters of 2018 it is apparent that take-up of office space in Germany’s top 7 cities - Hamburg, Berlin, Düsseldorf, Cologne, Frankfurt, Stuttgart and Munich - has fallen year on year, slipping to a total of 2.76m m². This emerged from figures compiled by German Property Partners (GPP). The 3rd quarter contributed 1.04m m² to the total. Despite the modest 5% drop due to the universal shortage of properties, the result is the second-highest recorded at the end of a 3rd quarter over the past five years. The vacancy rate in the top 7 cities continued its downward track and has now reached a new record low of 3.4%. Office rents rose in most cities. In Stuttgart alone, premium rents softened by 2%, the average rent stagnated. In terms of premium rents, Frankfurt once again topped the table with €42.00/m²/month. Berlin, however, took the lead in average rents, with a new level of €20.70/m²/month. Germany’s capital city posted higher growth in premium rents (+10% to €32.00/m²/month) and average rents (+14%) than the other locations.
The volume of completions in this and the coming year is calculated at 2.42m m² in 251 developments. Of this amount, some 68% has been pre-let, slightly more than at the end of the 1st half year. Coworking space and business centres remain much in demand. Their take-up of office space in the top 7 cities rose to 207,000 m² (2017: 113,000 m²) or 7.5% of the total, thus nearly equalling the figure posted for the prior year by the end of the 3rd quarter. Coworking facilities increasingly opted for peripheral locations in the top 7 cities, choosing inner city or CBD locations for only 38% of take-up compared with 70% in the same period last year.
“Because the economy is stable, demand remains very high. The growing shortage of properties has driven office rents to new heights and vacancy rates to new depths. Cities such as Berlin, where office space capacity is at critically low level, are particularly affected. Therefore the logical response, for example in the case of providers in the booming coworking space industry, has been to resort to properties in non-central locations,” remarks GPP spokesperson Guido Nabben, commenting on the figures for the first three quarters of 2018.

"The economy is extremely resilient, business is flourishing. In view of this we do not expect political crises to have a great impact on Germany’s real economy in the immediate future. We continue to estimate that there is unlikely to be any easing of the situation on the office rental markets in the top 7 cities before 2020. In the meantime, we predict that 2018 will end with total take-up of office space standing at 3.71 million square metres,” says Nabben.
Top known agreements for 15,000 m² or more | top 7 locations | Q1-3, 2018
City Project/property Tenant/owner-occupier Rental area (approx. m²)
STU Bregenzer/Steiermärker Strasse (dev. project) Robert Bosch (construction start/owner-occupier) 50,000
HAM Beiersdorf headquarters, Troplowitzstrasse Beiersdorf (construction start/owner-occupier) 45,000
MUC “iCampus”, Friedenstrasse, Grafinger Strasse Serviceplan Gruppe 40,000
FFM “Cielo”, Theodor-Heuss-Allee 100-104 Commerzbank 36,100
DUS “Heinrich Campus”, Heinrich-Erhardt-Strasse 61 Deloitte 35,500
BER Hildegard-Knef-Platz 2 Vattenfall 29,000
MUC “Kustermannpark”, Balanstrasse 55-59 HR department of Bavarian state capital Munich 25,000
FFM Europa-Allee 92 (plot 43) Frankfurter Allgemeine Zeitung 24,000
MUC Agnes-Pockels-Bogen 1 IT & telecom dep. (RIT) of Bavarian state capital Munich 23,000
MUC Hofmannstrasse 61, 63, 69 Bavarian state capital Munich 17,000
MUC Werinherstrasse 83-95 Deutsche Postbank 16,900
Source: German Property Partners (GPP)
Top 7 locations | Q1-3, 2018
Take-up of space
in m²
430,000 530,000 278,000 210,000 458,500 166,000 690,500 2,763,000
against prior yr in %
-8 -17 -4 -19 4 -26 +15 -5
Premium rent
in €/m²/month
27.00 32.00 27.00 22.50 42.00 23.50 36.50  
Average rent
in €/m²/month
15.60 20.70 16.00 14.60 20.60 13.75 18.50  
Stock of office space in millions m² 13.71 19.22 7.32 7.80 11.54 7.93 23.03 90.55
in m²
482,200 370,000 570,000 220,000 834,200 197,000 450,000 3,123,400
Vacancy rate
in %
3.5 1.9 7.8 2.8 7.2 2.5 2.0 3.4
2018 + 2019
in m²
344,000 623,500 218,000 200,000 333,000 201,000 500,000 2,419,000
Pre-letting ratios 2018 + 2019 in % 62 61 71 83 62 56 81 68
Source: German Property Partners (GPP)

Top 7 office markets
  • Once again, of all top 7 cities, Munich was the one with the highest growth. Year on year the take-up of office space rose by 15% to total 690,500 m².
  • The largest rental agreement in Munich was for 40,000 m² of office space in the “iCampus” which was signed in 3rd quarter by Serviceplan Gruppe; it was also the second-biggest new contract concluded in a top 7 city in the 3rd quarter.
  • Year on year a great many agreements for large amounts of space pushed the average rent up by 12% to € 18.50/m²/month.
  • In absolute terms, vacancy dropped more sharply here than in any other top 7 city, falling 31% to 450,000 m². It can thus be said that practically all the offices in the Zentrum, Zentrum West and Stadt West sub-markets are let.
  • This metropolis on the Main repeated its good figures from the prior year: after the first three quarters office take-up totalled 458,000 m², an increase of 4%.
  • Of the rental agreements signed in the 3rd quarter, the biggest was for 36,100 m² of office space taken by Commerzbank in the “Cielo” on Theodor-Heuss-Allee.
  • In no other top 7 city was a steeper drop in the vacancy rate recorded than in Frankfurt. Year on year the rate declined by 1.9% to a relatively sound 7.2%.
  • Coworking space providers took 49,600 m² of office space, allowing Frankfurt to edge past Munich to place first of the top 7. Take-up of space for coworking facilities in Frankfurt has thus already exceeded the total at the close of 2017.
  • Düsseldorf also came close to the amount of office space taken up in the same period a year ago, dropping 4% to 278,000 m².
  • So far this year the market has been marked by a large number of smaller agreements. Only three lets comprising over 5,000 m² were noted.
  • In the 2nd quarter Deloitte signed a rental agreement for 35,500 m² in the “Heinrich Campus”, which is the year’s biggest contract to date.
  • A vacancy rate of 7.8% means that in Düsseldorf the situation on the office market is not as tense as in the other top 7 cities. Vacant space here dropped by 1.2%. Moreover, some tenants (Handelsblatt, Trivago, uniper, L’Oréal) will be vacating their large office premises, most of which will then come onto the market in 2019.
  • The dearth of available properties was felt rather more keenly in Hamburg. Take-up of office space fell by 8% to 430,000 m² at the close of three quarters.
  • Renting 29,260 m², providers of coworking space accounted for 16% less take-up than a year ago. At the end of three quarters, Hamburg was thus the only top 7 city to register reduced activity in this sector of industry.
  • For the first time ever, the premium rent climbed to €27.00/m²/month in Hamburg as a result of several lets in expensive, centrally located office developments.
  • With take-up of 530,000 m², the capital city posted a 17% decline at the end of nine months.
  • At the close of the 3rd quarter the vacancy rate was 1.9%, lower than in any other top 7 city and an indication that the market can accommodate only a few tenants looking for large premises, especially in the central parts of the city.
  • So far this year, there have been ten agreements for office suites offering more than 10,000 m² of space.
  • Posting a 14% rise in average rents, Berlin overtook Frankfurt in the 3rd quarter to head this particular statistic. The average monthly rent for one square metre of office space was €20.70.
  • After the first three quarters this cathedral city reported office take-up of 210,000 m². Year on year this translates into a 19% drop.
  • During the year to date, the largest rental agreement was that signed by Design Offices for 14,000 m² on Schanzenstrasse/Von-Sparr-Strasse in the new build “I/D Cologne” development district.
  • Mirroring the position in Frankfurt, coworking firms accounted for more than a tenth of total office take-up in Cologne (25,000 m²).
  • By the end of the first three quarters, 166,000 m² of office space had been taken up in Stuttgart. This represented 26% less than in the same period a year before. Moreover, the decline was the biggest registered in the top 7 cities.
  • The shortage of space hindered agreements for premises in the top price bracket. Stuttgart was the only top 7 city to see a decline in the premium rent. Year on year it sank by 2% to €23.50/m²/month.
  • At the same time completions, including the “Campus Fasenenhof” on the southern edge of the city, led to the only increase in available property noted in any top 7 city. 17% more space was on the market. However, the location of this new space is such that the Stuttgart office market remains tight.

Press contact

Visitenkarte Xing
Britt Finke

Bleichenbrücke 9
20354 Hamburg

040-350 802 993
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