CITY SHORTY – LEIPZIG.

Leipzig: Monetary turnover by sub-markets (asset and share deals).

With about EUR 2.3 billion, developed properties again accounted for the largest share of turnover volume (asset deals), followed by freehold and partial freehold properties which saw turnover rise by 6.8 % to 1.3 bn when compared to the previous year, and building land (about EUR 262 million). This means that the pandemic made investments in residential real estate in Leipzig much more attractive still in the reporting year 2021.

Money turnover generated with building land amounted to around EUR 261.9 million in 2021, falling short of the record result of the previous year by around 6.5 % (2020: EUR 280 million). The average of the most recent decade was exceeded by around 62 %. The turnover with undeveloped commercial premises (asset, purely commercial) was around EUR 57.4 million for the reporting year, exceeding the previous year’s result by around 52 % (2020: EUR 37.7 million).

Leipzig: The market for office space.

The Covid pandemic put the brakes on the office market rally across Germany in 2020. With a record office take-up of around 167,000 sqm in 2021, there are already clear signs of increasing momentum on Leipzig’s office market at pre-Covid levels. The ten-year average was also exceeded with a plus of 53 % (Ø 2011 - 2020: 109,500 sqm).

Yet the lack of premises meeting demand in the city centre of Leipzig caused the weighted prime rent to rise to EUR 16.50/sqm. The scarcity in central locations within the city centre train “ring” allows the other office locations of the city to benefit, which is also accompanied by an increase of average rents in those areas as well. Irrespective of this development, the general rent level remains encouraging indeed for companies when compared to the rest of the region and the country, so that the success story of the “young” and growing city Leipzig can continue, also when office costs are concerned.

Through continuous space absorption and due to a lack of additional new supply, vacancy levels fell from a nominal 185,000 sqm at the end of 2020 (4.8 %) to only 170,000 sqm (4.4 %) at the end of 2021 over the course of a year.

Leipzig: The market for residential Property.

In 2021, the volume of residential properties traded on Leipzig’s property market was a moderate 1.6 % lower than in the previous year, which, however, had seen a new record. About EUR 2.4 billion were generated in this segment (undeveloped, developed, freehold and partial freehold properties) in the reporting year. The strongest increased was observed for individual residential construction (+ 39 % compared to 2020). The largest decline was observed for rental residential buildings (- 13 % compared to 2020).

The average property price for multi-family houses now amounts to EUR 2.6 million, a 6.5 % increase compared to the previous year. Freehold and partial-freehold properties also became 20 % more expensive with now EUR 227,000.

The rising demand, fuelled by the considerable increase of population in recent years, and the resulting rise in the number of households inevitably results in rising rents and purchase prices, given that the supply that meets demand is so (or too) low.

By now, the asking rent for existing and new homes across the city amounts to an average of EUR 9.80/sqm; in the purely new construction segment, rents of, on average, EUR 11.90/sqm are generated. This trend will continue for existing properties only in the near future, according to analyses of Aengevelt Research.