Germany’s regional centres more attractive than major cities

economy boom, when tenants had to part with up to EUR 31.00/sqm.

Double-digit percentage increases have also been registered in other sough-after locations. There is now almost no office space available for less than EUR 10.00/sqm.

More companies are now looking at co-working spaces in order to bridge space shortages. There are now 92 coworking space providers with a total of 5,000 sq.m. of office space in Berlin. Another 30,000 square metres is set to be added in 2017.

For the third year in a row, take-up in Hamburg’s office market exceeded 500,000 sq.m. in 2016. BNPPRE registered take-up of 543,000 sq.m. and Angermann reported 551,000 sq.m., representing growth of between 1 and 3%.

Lettings accounted for 492,000 sq.m., whereas owner-occupiers accounted for just 58,000 sq.m., reported Grossmann & Berger (G&B).

Demand has remained high for a number of years now, which has driven vacancies down to between 5% (E&V) and 5.9% (BNPPRE). Crease was registered in the City South district, where BNPPRE saw a 61% decline in available office space, which now stands at just 25,000 sq.m. In Hamburg’s CBD, the vacancy rate has fallen by 17% to 87,000 sq.m.

As a result of the shortage of available space and the high-price project development segment accounting for 20% of lettings, both the average office rent and peak office rent rose. G&B and BNPPRE both place the peak rent at EUR 26.00/sqm, which BNPPRE said is higher than at any point since 2008.

The average office rent at the end of 2016 lay between EUR 14.70/sqm (Angermann) and EUR 15.50/sqm ( G&B). The analysts expect take-up to exceed 500,000 sq.m. again in 2017, rents to climb higher and vacancies to continue to decline.