Germany's office markets show no sign of crisis yet - DTZ

The five key German office markets continued to enjoy calm waters in the third quarter compared with the turbulence in the financial markets in recent weeks, according to global property services firm DTZ.

'So far we are not feeling the impact of the crisis - quite the opposite in fact. Business firms are still looking for new premises. We do not expect to feel any repercussions of the financial turmoil before next year at the earliest. The big question will be whether the German government’s measures to boost the economy bear fruit and it proves possible to avoid a recession', said Jörg Nehls, CEO of DTZ Deutschland.

Between July and September, total take-up in Munich, Berlin, Düsseldorf, Frankfurt am Main and Hamburg amounted to 712,000 m² - which was only slightly less than in the second quarter (718,000 m2). The first nine months of the year produced turnover - including space acquired for owner-occupancy as well as lettings - of around 2.07 million m².

'That is just some 5,000 m² lower than the prior-year figure. Compared with the average turnover in the first three quarters of the year 2003 to 2007, this year's result is actually almost 500,000 m² or one third higher. It looks quite likely that aggregate take-up in the top five markets in 2008 as a whole will once again pass the 3-million mark,' Nehls concluded.

With a Q3 performance of 206,500 m2, Munich once again headed the German turnover charts. Since the beginning of the year, some 602,500 m² of office space in the South German city has found new occupants. In second place nationwide came Hamburg, with take-up of 131,000 m² in Q3 and 412,000 m² so far this year. In Frankfurt, leases concluded between July and September totalled 120,000 m2, lifting the 2008 result to 393,000 m² so far and giving Germany's financial centre third place in the nationwide list.

At the start of the fourth quarter, the volume of premises available for occupancy across the five markets was around 6.45 million m². This was some 500,000 m² less than twelve months previously. Within this period, the vacancy rate has fallen from 10.3 to 9.4% at present.

In Hamburg and Munich, Q3 brought an upward movement in top rents. In Hamburg, the top rent surged from EUR 23.80 to EUR 26 a month and is now three euros higher than at the start of the year. In Munich's inner city, the steady pressure of demand produced a rise of EUR 0.50 per m² and month to EUR 34.50.