Demand for office space in six key cities in Germany has rocketed, forcing the vacancy rates down and rental prices up, according to research by Savills.
The six cities in question; Berlin, Cologne, Dϋsseldorf, Frankfurt, Hamburg and Munich have seen a rise in rentals, with some recording five and six per cent increases. This is mainly due to the demand for office space in the cities, which has pushed the average vacancy rate down by 1.1 per cent to 9.3 per cent. The highest vacancy fall was in Frankfurt with 14.7 per cent, whilst Berlin’s vacancy rate fell to 5.8 per cent – which is still quite a substantial fall. So is this a sign that Germany’s office market is picking up?
Matthias Pink, Head of Research at Savills in Germany thinks so. He said: “With only a few office completions scheduled for the second half of the year we expect to see a further slight drop in vacancy rates as quality stock is taken up keeping rental levels, and particularly prime rents, stable across the country.”
So far, in the first half of 2012 take-up in the six cities mentioned has totalled around 1.38 million sq. m. of office space, which is down when compared to the same time last year. But Savills expects office take-up to be approximately 2.8 million sq. m. by the end of the year – which would match a ten year average. Not bad considering 2011 had “uncharacteristically high take-up levels in H1.”
Robert Kellershohn, Office Agency Managing Director at Savills in Germany said: “Overall German office markets are in good shape with take-up figures in line with the average of preceding years, vacancies on the decrease and rents stable at a high level.”
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