German office market sees best first-half year results ever
The German office market saw its best first half of the year results of all time, according to BNP Paribas Real Estate’s German Office Market H1 2017 report.
The German office market saw a take-up of over 1.89 million square meters in the first six months, 8 percent above 2016’s figure, according to the report. The take-up included the eight most important German markets, Berlin, Cologne, Düsseldorf, Essen, Frankfurt, Hamburg, Leipzig and Munich.
Another indication of the strength of demand in the first six months is that turnover exceeded the 10-year average by 24 percent, said Marcus Zorn, deputy CEO of BNP Paribas Real Estate Germany.
Viewed across all the cities under review, vacancy has shrunk by 11 percent in the past 12 months to 5.35 million square meters. The take-up figures of the past two years, combined with a scale of construction activity, which, although it has expanded, remains relatively modest by long-term standards, have prompted an appreciable fall in readily available space in most locations.
Rental prices have increased as well, with fresh take-up records coupled with modest construction activity fueling higher rental prices. Accordingly, prime rents have risen by an average of close to 3.5 percent in the past 12 months.
“The positive economic climate in Germany and the manifest upward trend in the EU create conditions from which many firms are benefiting,” said Zorn, “and the fact that neither the new U.S. administration nor Brexit has so far had any negative impact is boosting the confidence of the business community."
“Another particularly favorable factor has been the result of the elections in France, since this should make the future development of the EU more predictable. So currently, there are many positive influences boosting the office markets,” adds Zorn. “From today’s angle, all the signs suggest that demand in the second half of the year will retain its current strength.”