Office Hamburg 3Q2016

Big rental agreements let third quarter soar


Press release | Hamburg
05.10.2016


In the 3rd quarter take-up of office space in Hamburg developed a special dynamism. Whereas in the 1st half of the year barely any agreements for large properties were signed, the 3rd quarter result soared on the back of three contracts for more than 10,000 m² of office space. “As the KPMG lease for 12,000 square metres in the “Springer Quartier” development that we brokered at the end of the third quarter shows, the continuous fall in the supply of large areas of contiguous office space means that new developments, especially in inner city locations, are in huge demand,” remarks Andreas Rehberg, managing director of Grossmann & Berger. Hamburg posted a 17% rise in take-up of office space, growing from 355,000 m² in the same period of 2015 to 415,000 m² this year. The share of owner-occupiers dropped sharply to a mere 6%. In the 3rd quarter 175,000 m² of office space was taken up in Hamburg.

Office Hamburg 3Q2016Office Hamburg 3Q2016
Nine contracts for 5,000 m² or more
In the first nine months of the year 495 rental and owner-occupier agreements were completed, a figure similar to that in 2015. At the close of the 3rd quarter, the largest size category, 5,000 m² upwards, accounted for a share of about 23% of total take-up. Of the nine contracts for more than 5,000 m² of space, five were signed in the 3rd quarter of the year. Olympus Deutschland’s temporary rental of over 23,800 m² in “Poseidon-Haus” (Amsinckstrasse 67-71, City South) was the biggest let of the year, followed by Nordex Energy, a developer and manufacturer of wind turbines, who expanded their office space by taking 13,000 m² in a new-build project on Langenhorner Chaussee. The third-biggest agreement was concluded by KPMG, a consultancy, to rent some 12,000 m² in the “Springer Quartier” (Caffamacherreihe/Kaiser-Wilhelm-Strasse, City). The remainder of turnover was evenly spread over the other size segments of the market. With the exception of the 1,001 to 2,000 m² size segment, which comprised about 16% of the total, each of the others accounted for around 20% of the market.

City and City South account for 50 per cent of take-up
Once again, the quarter closed with City district in the lead with a 28% share of take-up (116,500 m²); City noted two new contracts for large office suites in the 3rd quarter, one signed by KPMG for space in the “Springer Quartier” and one by the University of Hamburg for premises at Gorch-Fock-Wall 5-7. City South followed as the second-biggest sub-market, accounting for 22% (89,200 m²). Much of this was attributable to the 3rd-quarter “Poseidon-Haus” let to Olympus Deutschland mentioned earlier and to rental agreements completed in the 2nd quarter by the AXA insurance group for space in the “Fleet Office II” (Heidenkampsweg 74+76) and by TUI Cruises in the “Double XX” (Heidenkampsweg 58). “So far, more than half of all office space turnover has been in the central sub markets of City and City South. Especially with its prestigious developments such as the “Springer Quartier”, “Alter Wall” and “Stadthöfe”, City is a very attractive district,” comments Rehberg.

KPMG contract hands top slot to consultancies
The 3rd-quarter KPMG agreement ensured that consultancies placed first in the ranking of take-up by industries. With a 17% share of total office take-up (68,800 m²) consultancies represented the biggest single group of tenants. Manufacturing placed second, partly due to the Olympus agreement, with a share of some 14% (58,100 m²). The third-biggest group of new users was the tourism and transport sector, accounting for a share of 10% of take-up (43,200 m²). Apart from the TUI Cruises rental agreement in the “Double XX” block, the contract signed by Ruby Hotel & Resorts for some 9,400 m² of space in the “Fleetbogen” (Düsternstrasse 1-3, City), made a significant contribution to the total.

Notably more readiness to pay top rates
Since the beginning of the year, numerous contracts in new-build developments in central locations have resulted in a higher average rent. Year on year the average rent, weighted by floor space, has risen by 40 cents. Compared with the previous quarter, the average rent has stabilized at €14.90/m²/month, which is high for Hamburg. The premium rent (top price segment accounting for a market share of 3% of lets in the past twelve months) increased significantly, both year on year (+ €1.00) and in comparison with the previous quarter (+ 50 cents). “In view of the good business environment, we are noticing that customers are more willing to pay top rents for top properties, as long as the entire package is right for the user,” says Rehberg, explaining the rise in premium rents.

Vacancy rate falls to 5 per cent
The amount of empty space continued to shrink in the 3rd quarter. At the end of the quarter the vacancy rate in Hamburg, including sub-let space, sank from 5.6% in the same period a year before to its current 5.0%. Only 675,900 m² of office space in Hamburg was available at short notice. The decline in available properties was especially obvious in the two busiest markets, City and City South. There was a 21% reduction in empty space in these two sub-markets. “As far as quantity goes, both sub-markets appear to have adequate reserves of space. But a closer look shows that in particular there is a growing shortage of larger, contiguous rentable areas. Companies are well advised if they secure their desired location as soon as possible,” says Rehberg, commenting on the available real estate.

By the end of 2016 the volume of completions in Hamburg is expected to reach 244,000 m² in 28 projects. Compared with the previous quarter, the pre-let rate is now even higher, at 86%. Therefore a mere 35,000 m² of speculative space is coming onto the market in 2016. For 2017 the forecast completion volume totals 230,000 m² in 30 projects. With the pre-letting rate at 41%, the best estimate is that 135,000 m² will be available on the open market. The sub-markets City (119,000 m²), City South (62,000 m²) and HafenCity (54,000 m²) are where completions are concentrated in 2016/2017.

Outlook
So far the Brexit vote has had no recognizable impact on Hamburg’s office letting market. On the contrary, the current figures indicate that the market is benefiting from the overall growth of the German economy. “The surprisingly high turnover of office space in Hamburg during the first three quarters is a hopeful sign that the year will end with a strong rally. Depending on how many of the rental agreements still in the pipeline are signed this year, the annual total take-up for 2016 could equal the prior year’s final result of 540,000 m²,” Rehberg says.

The detailed market survey will be ready for download shortly on the G&B-website.

Source graphics: Grossmann & Berger GmbH

Press contact

Visitenkarte Xing
Britt Finke


Bleichenbrücke 9
20354 Hamburg

b.finke@grossmann-berger.de

040-350 802 993
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