Savills World Research
Germany offices
Market in Minutes
Germany office markets
Q1 2015
The facts at a glance
Increasing rents and less supply offer opportunities
■Take-up in the top six office markets
totalled 680,000 sq m in the first
quarter of 2015, which represents a
decline of 3.1% on the same quarter
last year.
■Although demand is strong across
all markets this has not yet resulted
in higher take-ups in all locations. In
Berlin (-25%), Cologne (-12%) and
Frankfurt (-7%) a number of large scale
searches are in the market so that
significant increases of turnover can be
expected throughout the year.
■Munich (+20%), Hamburg (+16%)
and Düsseldorf (+2%) saw increases in
take-up levels already in the first three
months of the year.
■With the majority of the space
completed in Q1 being pre-let und
following various decreases in stock,
the vacancies continued to drop. On
average across the six markets the
vacancy rate dropped by 30 basis
points to 7.7%. The total volume of
new office completions in 2015 is
anticipated at approx. 1 million sq m,
with circa two thirds pre-let.
■On average across the six markets
the prime rent rose slightly by 1.0%
year-on-year to € 27.63/sq m/month,
while the average rent even increased
by 5.4% to € 14.73/sq m/month.
■Due to the solid first quarter and a
positive outlook for the remainder of
the year the 2014 total take-up of circa
2.7 million sq m will most likely be
surpassed. Backed upon the current
parameters – strong demand, reducing
vacancies and increasing rents – the
prospects of success for developers
look very good.
savills.de/research
01
Market in Minutes | Germany Office Markets
Q1 2015
Top six office markets at a glance
Q1 2015
TABLE 1
Key office market figures
Take-up
(sq m)
Vacancy rate
(%)
Stock
(million m²)
Prime rent
(€ per sq m/month)
Average rent
(€ per sq m/month)
Q1
2015
y-o-y
change
Q1
2015
y-o-y
change
Q1
2015
y-o-y
change
Q1
2015
y-o-y
change
Q1
2015
y-o-y
change
Berlin
171,300
-24.6%
4.3
-40bps.
19.1
+1.4%
22.80
+1.3%
13.90
+7.8%
Düsseldorf
69,000
+1.5%
10.9
+10bps.
7.7
+0.7%
26.00
-5.5%
14.20
-3.4%
Frankfurt
82,000
-7.3%
11.4
-40bps.
12.0
+0.2%
38.00
+/-0.0%
17.50
+/-0.0%
Hamburg
120,585
+15.7%
6.1
-90bps.
13.4
+2.2%
24.50
+2.1%
14.50
+9.4%
Cologne
50,800
-12.4%
7.4
-20bps.
7.7
-2.2%
20.00
-10.3%
12.40
-4.6%
Munich
187,220
+19.7%
5.9
-20bps.
22.8
+2.2%
34.50
+3.0%
15.85
+3.8%
Top 6
680,905
-3.1%
7.7
-30bps.
82.5
+1.2%
27.63
+1.0%
14.73
+5.4%
Source: Savills
GRAPH 1
GRAPH 2
Take-up and vacancy rate
Rental levels
Vacancy rate
1.0
4%
0.5
2%
0.0
0%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
Source: Savills / * forecast
Prime rent - Ø Top 6
Average rent - Ø Top 6
30
25
€ per sq m/month
6%
2.73
1.5
0.68
8%
2.71
2.0
2.77
10%
3.02
2.5
3.21
12%
2.91
3.0
2.30
14%
3.19
3.5
3.49
16%
3.00
4.0
2.49
million sq m
Take-up
20
15
10
5
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
Source: Savills / * forecast
Top six market in minutes
Owner-occupier deals and transactions from public sector drive take-up
•
Office take-up across the top six markets totalled 680,000 sq m, representing a decrease of 3.1% compared with
the same quarter last year. The prime rent rose by 1.0% to €27.63 per sq m/month while the vacancy rate fell by
30 basis points to 7.7%.
•
Particularly in Hamburg the result was strongly characterised by owner-occupier transactions, notably in the public
sector. In the current capital market environment also medium-sized companies, foundations and organisations tend
towards buying properties rather than staying tenants. This is because in light of the extremely low or even negative
interest rates on the money and bond markets those players wish to reduce surplus liquidity. Hence the purchase of
office properties for own occupancy is an attractive option for many companies.
•
Given the reducing vacancies and continuously low development activity, tenants in city centre and city fringe
locations have to expect further rental increases.
savills.de/research
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Market in Minutes | Germany Office Markets
Q1 2015
Top six office markets at a glance
Q1 2015
GRAPH 3
GRAPH 4
Prime rent by location
Berlin
Düsseldorf
Frankfurt
Average rent by location
Hamburg
Cologne
Munich
Berlin
45
Düsseldorf
Frankfurt
Hamburg
Cologne
Munich
25
40
20
35
€ per sq m/month
€ per sq m/month
30
25
20
15
10
15
10
5
5
0
0
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
Source: Savills / * forecast
Source: Savills / * forecast
GRAPH 5
GRAPH 6
Office employment
Development pipeline
Düsseldorf
Frankfurt
Hamburg
Cologne
Munich
1,200,000
115
1,000,000
110
800,000
105
sq m
2005 = 100
Berlin
120
100
600,000
400,000
95
200,000
90
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
0
2015*
2015
Source: Oxford Economics / * forecast
2016
2017
Source: Savills
TABLE 2
The largest letting transactions in Q1 2015 at a glance*
Location
Tenant
Office space (sq m)
Berlin
Rocket Internet
approx. 22,000
Munich
BSH Bosch und Siemens Hausgeräte
approx. 14,500
Munich
Condé Nast
approx. 9,800
Munich
City of Munich
approx. 9,000
Cologne
Jobcenter
approx. 7,600
Source: Savills / * only published transactions are shown
savills.de/research
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Market in Minutes | Germany Office Markets
Q1 2015
Berlin
Q1 2015
GRAPH 7
GRAPH 8
Take-up and vacancy rate
Rental levels
Take-up
Vacancy rate
2%
0
€ per sq m/month
200,000
750,000
3%
171,300
300,000
773,800
4%
680,500
5%
400,000
834,800
500,000
778,900
6%
754,700
7%
600,000
606,300
700,000
696,400
8%
768,300
9%
800,000
776,000
900,000
100,000
y-o-y change prime rent
10%
657,800
sq m
1,000,000
Prime rent
Average rent
30
15%
25
10%
20
5%
15
0%
10
-5%
5
-10%
1%
0
0%
-15%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
Source: Savills / * forecast
Source: Savills / * forecast
GRAPH 9
GRAPH 10
Take-up by submarket
Development pipeline
Potsdamer
Platz / Leipziger
Platz
1%
City West
11%
300,000
250,000
East/North/
South/West
21%
sq m
200,000
150,000
100,000
City East
15%
City outskirts
61%
50,000
0
2015
Source: Savills
2016
2017
Source: Savills
Berlin market in minutes
Very high demand, but hardly large deals
•
Office take-up in the first quarter of 2015 totalled 171,300 sq m, representing a decrease of 24.6% compared with
the same quarter last year. The prime rent rose by 1.3% to €22.80 per sq m/month while the vacancy rate fell by
40 basis points to 4.3%.
•
Demand in Q1 was very high but this did not translate into an increase in take-up as only two large deals were
completed. By far the largest deal was the letting of 22,000 sq m to Rocket Internet in the GSW office tower in
Kreuzberg. However, the majority of take-up was attributable to deals in the small and medium size segments.
•
With a number of large deals in the pipeline around the main railway station, for example, take-up for the year is likely
to exceed 700,000 sq m once again. The vacancy rate is expected to rise moderately for the first time since 2007 by
the end of the year.
savills.de/research
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Market in Minutes | Germany Office Markets
Q1 2015
Düsseldorf
Q1 2015
GRAPH 11
GRAPH 12
Take-up and vacancy rate
Rental levels
267,142
100,000
0
250,000
4%
69,000
200,000
237,300
6%
342,400
300,000
310,000
8%
312,000
400,000
373,000
10%
202,000
500,000
424,100
12%
520,700
600,000
322,400
sq m
700,000
Vacancy rate
14%
y-o-y change prime rent
€ per sq m/month
Take-up
Average rent
15%
25
10%
20
5%
15
0%
10
-5%
5
2%
-10%
0
0%
-15%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
Source: Savills / * forecast
Source: Savills / * forecast
GRAPH 13
GRAPH 14
Take-up by submarket
Development pipeline
other
submarkets
27%
Prime rent
30
140,000
Düsseldorf North
/ Airport
17%
120,000
100,000
Seestern
17%
Source: Savills
60,000
40,000
Mörsenbroich /
Zooviertel
11%
West-Left bank
of Rhine
12%
sq m
80,000
20,000
City centre
16%
0
2015
2016
2017
Source: Savills
Düsseldorf market in minutes
Düsseldorf North / Airport and Seestern with high take-up figures
•
Office take-up in the first quarter of 2015 totalled 69,000 sq m, representing an increase of 1.5% compared with the
same quarter last year. The prime rent declined by 5.5% to €26.00 per sq m/month while the vacancy rate rose by
10 basis points to 10.9%.
•
Aside from four larger deals, letting activity in Q1 was largely characterised by lettings in the small office segment.
More than half of transactions completed were for less than 500 sq m. The four largest lettings, each above
4,000 sq m, were all outside of the City submarket. The Düsseldorf North / Airport and Seestern office submarkets
were particularly strong, each accounting for 17% of take-up.
•
In terms of take-up, this year is likely to see an increase. With a number of large requirements in the market, the
forthcoming quarters will register higher take-up figures. Based upon these requirements, take-up for the whole year
is likely to exceed last year’s figure of 237,000 sq m.
savills.de/research
05
Market in Minutes | Germany Office Markets
Q1 2015
Frankfurt
Q1 2015
GRAPH 15
GRAPH 16
Take-up and vacancy rate
Rental levels
Take-up
Vacancy rate
y-o-y change prime rent
Prime rent
Average rent
20%
900,000
18%
40
15%
800,000
16%
35
10%
700,000
14%
30
5%
600,000
12%
25
0%
500,000
10%
400,000
8%
20
-5%
15
-10%
10
-15%
2%
5
-20%
0%
0
400,000
82,000
370,000
439,000
509,900
415,000
475,000
355,000
0
500,000
330,000
100,000
600,000
6%
200,000
520,000
300,000
€ per sq m/month
20%
sq m
1,000,000
45
4%
-25%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
Source: Savills / * forecast
Source: Savills / * forecast
GRAPH 17
GRAPH 18
Take-up by submarket
Development pipeline
other
submarkets
4%
Westend
2%
Frankfurt East
4%
350,000
300,000
250,000
Niederrad
4%
Frankfurt West
9%
sq m
200,000
150,000
100,000
50,000
Banking district /
City
77%
0
2015
Source: Savills
2016
2017
Source: Savills
Frankfurt market in minutes
One large owner-occupier deal accounts for 40% of take-up
•
Office take-up in the first quarter of 2015 totalled 82,000 sq m, representing a decrease of 7.3% compared with the
same quarter last year. The prime rent remained unchanged at €38.00 per sq m/month while the vacancy rate fell by
40 basis points to 11.4%.
•
The acquisition of 32,000 sq m on Windmühlstraße by Deutsche Vermögensberatung accounted for approximately
40% of total office take-up. Other significant deals included eleven transactions in the medium size segment
between 1,000 sq m and 5,000 sq m.
•
With a number of larger requirements currently in the market, higher take-up figures are expected in the forthcoming
quarters. These requirements are not only focused on central locations but also extend to peripheral office
submarkets, which are once again in increasing demand as back office locations against a background of improving
economic conditions. Take-up for the entire year is likely to reach around 400,000 sq m.
savills.de/research
06
Market in Minutes | Germany Office Markets
Q1 2015
Hamburg
Q1 2015
GRAPH 19
GRAPH 20
Take-up and vacancy rate
Rental levels
Vacancy rate
y-o-y change prime rent
Prime rent
Average rent
300,000
6%
15
0%
200,000
4%
10
-5%
100,000
2%
5
0%
0
0
€ per sq m/month
5%
480,000
20
120,585
8%
511,100
400,000
427,000
10%
430,000
25
533,000
10%
483,000
500,000
372,900
15%
504,432
30
570,000
12%
460,000
600,000
417,000
sq m
Take-up
-10%
-15%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
Source: Savills / * forecast
Source: Savills / * forecast
GRAPH 21
GRAPH 22
Take-up by submarket
Development pipeline
400,000
other
submarkets
23%
350,000
300,000
City
41%
sq m
250,000
City North
6%
200,000
150,000
100,000
City South
8%
50,000
Outer Alsterlage
8%
0
HafenCity
14%
Source: Savills
2015
2016
2017
Source: Savills
Hamburg market in minutes
High activity in all size segments
•
Office take-up in the first quarter of 2015 totalled 120,600 sq m, representing an increase of 15.7% compared with
the same quarter last year. The prime rent rose by 2.1% to €24.50 per sq m/month while the vacancy rate fell by
90 basis points to 6.1%.
•
Once again, large owner-occupier transactions at the start of the year drove high take-up in the Hamburg office
market, the largest of the three transactions coming from the public sector. Indeed, owner-occupier deals accounted
for more than 40% of overall office take-up in the first quarter. Last year, these accounted for just over 15% of takeup; a high figure itself.
•
The breadth of the Hamburg market has also improved. This is reflected in the high level of activity in the medium
size segment between 1,000 sq m and 3,000 sq m. There were 21 deals in this size segment in the first quarter
(Q1 14: 15 transactions).
savills.de/research
07
Market in Minutes | Germany Office Markets
Q1 2015
Cologne
Q1 2015
GRAPH 23
GRAPH 24
Take-up and vacancy rate
Rental levels
Take-up
Vacancy rate
y-o-y change prime rent
450,000
9%
400,000
8%
350,000
7%
300,000
6%
250,000
5%
200,000
4%
150,000
3%
2%
250,000
225,000
270,000
235,000
319,000
240,000
250,000
300,000
0
285,000
50,000
300,000
235,000
100,000
€ per sq m/month
10%
50,800
sq m
500,000
Prime rent
Average rent
30
15%
25
10%
20
5%
15
0%
10
-5%
5
-10%
1%
0
0%
-15%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
Source: Savills / * forecast
Source: Savills / * forecast
GRAPH 25
GRAPH 26
Take-up by submarket
Development pipeline
other
submarkets
Sülz / Lindenthal 8%
4%
140,000
120,000
Ossendorf /
Nippes
7%
100,000
80,000
City
52%
sq m
Bayenthal /
Marienburg
8%
60,000
40,000
Ehrenfeld /
Braunsfeld
21%
20,000
0
2015
Source: Savills
2016
2017
Source: Savills
Cologne market in minutes
Despite shortage of attractive space only few (speculative) developments
•
Office take-up in the first quarter of 2015 totalled 50,800 sq m, representing a decrease of 12.4% compared with the
same quarter last year. The prime rent declined by 10.3% to €20.00 per sq m/month while the vacancy rate fell by
20 basis points to 7.4%.
•
Between January and March, eight transactions for more than 1,000 sq m were completed, although only one of
these was above 5,000 sq m. Large contiguous space is now rare. However, while such space is scarce and owneroccupiers in particular normally prefer new-build, there are only few (speculative) developments in the Cologne market. Developers are currently profiting from such market conditions by agreeing long-term leases on attractive terms.
•
In view of market conditions, we expect rents to recover again by the end of the year. With a number of large
outstanding requirements in the market, particularly from the public sector, take-up is also likely to improve further
over the course of the year to reach the 250,000 sq m mark.
savills.de/research
08
Market in Minutes | Germany Office Markets
Q1 2015
Munich
Q1 2015
GRAPH 27
GRAPH 28
Take-up and vacancy rate
Rental levels
Vacancy rate
12%
1,000,000
10%
8%
600,000
6%
400,000
4%
600,000
593,000
606,100
705,100
847,500
586,800
518,400
0
770,000
585,000
200,000
747,000
187,220
800,000
625,000
sq m
1,200,000
y-o-y change prime rent
€ per sq m/month
Take-up
2%
Average rent
20%
35
15%
30
10%
25
5%
20
0%
15
-5%
10
-10%
5
-15%
0
0%
-20%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2015*
Q1
Source: Savills / * forecast
Source: Savills / * forecast
GRAPH 29
GRAPH 30
Take-up by submarket
Development pipeline
250,000
City West
20%
other
submarkets
25%
Prime rent
40
200,000
sq m
150,000
100,000
City North
19%
Outskirts South
10%
50,000
City
12%
City East
14%
Source: Savills
0
2015
2016
2017
Source: Savills
Munich market in minutes
Deals of 5,000 sqm and above accountable for significant plus of take-up
•
Office take-up in the first quarter of 2015 totalled 187,220 sq m, representing an increase of 19.7% compared with
the same quarter last year. The prime rent rose by 3% to €34.50 per sq m/month while the vacancy rate fell by
10 basis points to 5.9%.
•
The high take-up figures also reflect the return of large deals. There were seven transactions for more than
5,000 sq m in the first quarter alone. In 2014, there were just eleven deals in this size segment throughout the entire
year.
•
With a number of large requirements outstanding in the market (including some for more than 10,000 sq m) or
pending completion, there is a high probability that take-up will exceed the 600,000 sq m mark by the end of the
year. Owing to the scarce supply in the city centre, the prime rent is expected to rise slightly further over the course
of the year.
savills.de/research
09
Market in Minutes | Germany Office Markets
Q1 2015
Savills Germany
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