German office markets see 30% rise in lettings: Savills

The five major German office markets - Berlin, Düsseldorf, Frankfurt, Hamburg and Munich - saw a stunning year-end finish in terms of take-up, according to international real estate advisor Savills, with total figures in each of the markets outperforming the results of 2009. Overall, take-up in the five locations rose by approximately 31% compared to 2009 to some 2.68 million m².

Of particular significance was Berlin, which achieved more than a third of its total annual take-up in the final quarter following several major letting transaction completions towards the end of the year, such as the letting of 29,500 m² to BlmA. 'The remaining four markets saw a successful fourth quarter too,' added Robert Kellershohn, Director Office Agency at Savills and responsible for the company’s office agency activities in Germany.

In addition to a strong final quarter performance in Berlin, Düsseldorf recorded the highest increase in take-up of 93% year-on year. This result is followed by Frankfurt (+39%), Hamburg (+30%), Berlin (+21%) and Munich (+13%). Several deals were in excess 10,000 m2, a trend that re-emerged notably in the second half of the year, and contributed to these good results.

A significant rise in demand, also in light of the declining figures of new office completions in most of the markets, has led to a turnaround of the rental levels. Only in Hamburg and Munich did prime rents continue to drop slightly compared to the previous quarter. In Frankfurt the city maintained similar levels and Berlin and Düsseldorf saw a slight upward trend.

Vacancy rates moved downwards in some markets over the past few months but exceeded 2009 levels in most markets (Düsseldorf, Frankfurt, Hamburg) when compared year-on-year. Only Berlin and Munich saw vacancies remain stable over the course of the year.

Savills expects 2011 take-up levels will at least match the 2010 results thanks to the continuously favourable economic climate. Rents are expected to increase throughout 2011, particularly in the prime sectors, but a significant reduction in vacancies is unlikely to materialise in the short term.