In the first half of 2010 take-up in the five major German office markets Berlin, Düsseldorf, Frankfurt, Hamburg and Munich totalled approx. 1.16 million m². Compared to H1 2009 this represents a growth of 10.3%, albeit the increase is attributable to the high transaction volume achieved in Düsseldorf.
"In the first six months of the year take-up of office space in Düsseldorf was almost two and a half times higher than last year whilst the remaining four markets more or less matched their 2009 result," outlines Robert Kellershohn, Director Office Agency at Savills and responsible for office agency activities in Germany.
Due to the Vodafone letting in Q1 and a number of further major transactions in Q2 take-up of office space in Düsseldorf increased by 138.5% year-on-year. Munich saw a rise of 5.4%. In Frankfurt turnover also increased slightly (+2.7%) due to the European Central Bank's owner occupier transaction (approx. 104,000 sq m). Berlin almost exactly matched its result of last year (-2.5%), Hamburg (-7.5%) faced a slight decline in take-up. Overall, the consolidation of take-up continued at the modest level previously achieved.
With regard to rental levels the situation was bipolar. Whilst in most cities the prime rents continued to drop marginally and lagged behind last year's results across the board the average rents exceeded the 2009 figures. This is the result of the dominance of the central office submarkets which continued to last over the first half of 2010 as these locations have become increasingly attractive due to the generally tenant-friendly market environment.
As in current market stages the peak of the cycle of new office completions is facing the bottom of take-up, vacancies were on the rise in all cities over the past months and stood markedly above their previous year's level at the end of H1. Meanwhile more than every tenth square meter on average in the German office letting markets is unoccupied.
The consolidation process is expected to continue over the second half of the year. Vacancies are likely to rise further at a moderate rate until year end with (prime) rents continuing to fall marginally. In terms of take-up Savills Research anticipates a result of approx. 2.2 million m² and hence an increase of about 10% compared to 2009.