According to international property advisor Savills, during the first six months of 2009 a total of approximately 987,500 m² of office space was acquired in the big five German office markets of Berlin, Düsseldorf, Frankfurt, Hamburg and Munich which marks a reduction of just below 32 % compared to the same time period in 2008.
The cyclical downturn in the German office letting markets, which had already become apparent at the beginning of the year, continued therefore in Q2. Despite this prime rents contracted marginally compared to the previous year's figures (approx. -1.7 % on average across all markets) however the traditionally volatile Frankfurt market prime rents fell noticeably. Düsseldorf was the only market which achieved a slight increase in prime rent in comparison to 2008, in mid market a reduction of 4.4 % on average was the most significant decline.
In all of the five markets the letting performance reduced by double-digit percentages. Compared to the first half of 2008, the decrease amounted to some 30% in Berlin, 59% in Düsseldorf, 13% in Frankfurt, 29% in Hamburg and 33% in Munich. Even when comparing the two quarters of 2009 almost every market suffered a reduction in take-up. Solely in Munich the transacted volume of Q2 (approx. 132,900 m²) was higher than in the first three months of 2009 (approx. 118,000 m²), and in Hamburg take-up remained stable.
Savills predicts assuming H2 09 sees similar take-up of office space at below a third of last year's figure, the annual transacted volume will be 1.63 million m² for the top five German office markets and be the lowest figure for the past 10 years. However, a couple of large-scale transactions currently under negotiation are expected to be successfully closed during the course of the second half of 2009. Nevertheless including these, take-up will most likely remain considerably below the 10-year average (approx. 2.2 million m²). Furthermore increasing unemployment expected for 2009 may well depress the office markets further. Despite low amounts of newly completed space, vacancies will continue to increase in all cities and rental levels will remain under pressure.