Germany's major office markets have good first quarter

The six largest office markets in Germany recorded a strong first quarter in 2008, according to a new report published on Wednesday by Colliers PropertyPartners. Take-up in Berlin, Dusseldorf, Frankfurt, Hamburg, Munich and Stuttgart rose by about 6.6% to 698,800 m2, compared to the previous quarter. Munich was the strongest performer with take-up of 231,100 m2, followed by Hamburg and Berlin with 120,000 m² and 105,600 m² respectively.

Colliers PropertyPartners said that Dusseldorf and Munich each recorded the highest rate of increase amounting to about 26% in comparison with the first quarter of 2007. Although Hamburg registered almost 16% less take-up than in the first quarter of 2007, the 120.000 m² of leased space was significantly above the long-standing average.

Obtainable office space, which can be occupied on short notice, fell significantly in some locations due to the strong take-up in the last 12 months. The vacancy rate declined markedly in Berlin (8.2% to 7.6%), Dusseldorf (9.2% to 8.8%), Frankfurt (15.6% to 14.9%) and Hamburg (7.8% to 7.0%). Only Munich and Stuttgart recorded an increase in vacancy levels albeit at moderate levels of 7.2% and 6.5% respectively.

Frankfurt is still the undisputed leader with regard to rent prices. Both premium and average rent prices at EUR 38.00/m²/month and EUR 17.70/m2/month respectively are considerably higher than those in other cities. Munich comes in as close second with premium rents totalling EUR 30/m2/month and average rents approximately EUR 14.45/m2/month.

Prospects for the rest of the year are all positive for the six cities in question. Following last year's strong performance, a similarly robust year is forecast in 2008, Colliers PropertyPartners said. In addition, most locations can expect at least stable, if not increasing premium and average rent prices.