DIP records a rising space turnover on German office markets

The continuous comparative analysis of twelve German office markets (Berlin, Dresden, Düsseldorf, Essen, Frankfurt/M., Hamburg, Cologne, Leipzig, Magdeburg, Munich, Nuremberg and Stuttgart) by DIP - Deutsche Immobilien-Partner allows for cross-section comparisons between the markets in the North and South or the West and East of Germany and between cities with different market sizes.

The analyses of DIP – Deutsche Immobilien-Partner show that the continuously robust economic situation in Germany has a positive effect on office markets:
- In the first three quarters of 2016, total office space turnover (including owner-occupiers) amounts to about 2.97 million m² and is therefore roughly 10 % or 260,000 m² higher than the result of the previous year. While office space turnover in the “Big Seven” rose by approximately 12 %, it fell by 12 % in the five medium-sized office centres. The various individual markets exhibit different development trends (see below).
- In the course of turnover increase and positive net absorption (increased use of office space), the amount of vacant office space on the DIP markets fell considerably by about one million m² in the course of a year. Currently, about 6.4 million m² (I to III quarter of 2015: about 7.4 million m²) are vacant. Analogously, the vacancy rate fell from 7.2 % at the end of September 2015 to currently 6.3 %.
- Compared to the same time last year, the average top rent on the analysed Germany office markets rose by about EUR 1.20/m² or 5 % to currently about EUR 27.20/m².

(Here you can download the summary table as PDF file)

DIP office markets: Higher office space turnover
During the first three quarters of 2016, the twelve DIP office markets (Berlin, Bremen, Dresden, Düsseldorf, Essen, Frankfurt/M., Hamburg, Cologne, Leipzig, Magdeburg, Munich, Nuremberg and Stuttgart) saw office space turnover increase by about 10 %, amounting to approximately 2.97 million m² (including owner-occupiers), when compared to the same period last year (I-III Quarter of 2015: about 2.71 million m²).

Mixed market
• DIP determined an, in part, considerable increase in office turnover for the cities Cologne (+39 %), Frankfurt am Main (+38 %), Stuttgart (+34 %), Dresden (+21 %), Hamburg (+17 %) and Munich (+11 %).
• A decline of space turnover was recorded in Nuremberg (-3 %), Berlin (-4 %), Düsseldorf (-10 %), Leipzig (-15 %), Magdeburg (-21 %) and Essen (-31 %).

Rising office space turnover in the “Big Seven”
• According to analyses of DIP, the “Big Seven” (Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich, Stuttgart) accounted for an office space turnover of 2.72 million m² (+12 %) in total or an increased share of 92 % of the entire office space turnover on the twelve DIP markets (I-III quarters 2015: 2.42 million m² or 89 %).
• Like last year, the office letting market in Berlin was able to defend its leading position as the office market with the highest turnover in Germany against the runner-up Munich. Even though space turnover fell by about 26,000 m² to a total of 566,000 m² when compared to last year, Berlin still is the number 1. In Munich, 550,000 m² (+55,000 m²) were let so far in 2016. 
• Hamburg ranked third at a certain distance. Here, office space turnover rose by 60,000 m² to currently about 410,000 m².
• The highest increase in absolute numbers was recorded in Frankfurt am Main with about 102,000 m² to now 371,000 m². Cologne and Stuttgart also saw considerable increases by +75,000 m² (270,000 m²) and +65,000 m² (255,000 m²) respectively.
• On the other hand, DIP recorded a marked decline of space turnover in Düsseldorf (298,000 m²; -34,000 m²).

Office space turnover on medium-sized DIP office markets declining
• Overall space turnover development on the medium-sized DIP office markets was negative: Space turnover fell by about 12 % when compared to the previous year. In total, the cities Dresden, Essen, Leipzig, Magdeburg and Nuremberg account for only about 8 % of space turnover recorded in Germany with approximately 250,000 m².
• When looking at the individual markets, it becomes apparent that space turnover in Essen (61,000 m²; -27,000 m²), Leipzig (66,000 m²; -12,000 m²) and Magdeburg (16,500 m²; -4,500 m²) fell considerably. Only Nuremberg (46,500 m²; -1,500 m²) saw figures comparable to the previous year. Only Dresden (58,000 m²; +10,000 m²) was able to slightly increase turnover.

Reduction of office vacancies
• The total area of office space available at short notice fell by about 960,000 m² from approximately 7.39 million m² at the end of September 2015 to currently about 6.43 million m² on the twelve analysed German markets.
• Analogously, the average vacancy rate of the twelve DIP office markets fell from 7.2 % to now 6.3 % in the course of a year.
• DIP recorded a notable reduction of supply in Munich (-20 %), Berlin (-17 %), Leipzig (-17 %), Düsseldorf (-13 %), Magdeburg (-13 %), Dresden (-12 %) and Cologne (-12 %).
• The highest amount of vacant office space can be found in Frankfurt/Main (about 1.25 million m² or 10.4 of supply) and Berlin (about 950,000 m² or 5.0 %). Munich ranked third with a supply reserve of about 880,000 m² or 4.6 %.

Top rent and average rents rising
• Within a year, the weighted average top rent on the twelve analysed German DIP office markets rose by EUR 1.20/m² or about 5 % to approximately EUR 27.20/m² (Q3/2016). Especially Berlin saw an above-average increase in top rent (+8.5 %).
• The average rent level for office space in city centres also rose markedly, by about 12 % or EUR 2.00/m² from EUR 16.70/m² to about EUR 18.70/m² in the third quarter of 2016. The highest increases in prices were determined for Dresden (+12 %), Berlin (+10.5 %) and Düsseldorf (+7 %).

DIP - Deutsche Immobilien-Partner
DIP was founded in 1988 as innovation in its sector and since then has been continuously expanded as the most important association of legally independent real estate service providers. The partners are: AENGEVELT IMMOBILIEN GmbH & Co. KG, Aigner Immobilien GmbH, Arnold Hertz & Co. KG, Immobilien Sollmann + Zagel GmbH, Immobilienmarkt Hanse GmbH, Immobilienvermittlung BW GmbH, Justus Grosse Projektentwicklung GmbH, KSK-Immobilien GmbH and Schneider+Cie. GmbH & Co. KG.

In 2015, the nine DIP partners with more than 550 employees and 25 branches across Germany brokered real estate sales (residential and commercial) with a total transaction volume of about EUR 1.5 billion. Added to this are about 300,000 m² of brokered letting space for industrial purposes.

Moreover, the DIP’s scope of services was sensibly expanded by “preferred partners”. These are: Allianz Handwerker Services GmbH, DEKRA Industrial International GmbH, DLM Deutsche LichtMiete, EBZ Business School GmbH, GLS ImmoWert GmbH and GÖRG Partnerschaft von Rechtsanwälten mbB.

With this tried and tested expansion into a competence network of renowned “classic” real estate service providers as DIP partners and specialists from various service organisations as “preferred partners”, DIP offers its national and international customers “complete one-stop shop real estate services”.