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Stable Office Market in Hamburg

Demand for office space remains at high level, Average rent stable.

At the end of the Q3, take-up of office space in Hamburg had reached a total of some 355,000 m². Some 104,000 m² of office space was let or taken by owner-occupiers in the third quarter, about 20,000 m² less than in the first two quarters.

In Demand: Former Axel Springer Complex

In the first three quarters of the year, six transactions involved more than 5,000 m² of space; four of these were closed by owner-occupiers. The biggest trade remained the purchase of a section of the former Axel-Springer complex, which the City of Hamburg bought in the 1st quarter to provide the Borough Council of Hamburg-Mitte (Caffamacherreihe 3, City) with 32,000 m² of offices. The City of Hamburg likewise accounted for the largest rental contract of the year, with a second-quarter agreement to take some 19,400 m² for the regional tax offices of Bergedorf, Oberalster and Wandsbek and the tax office for large enterprises (Nordkanal Strasse 22+24, City South). Grossmann & Berger was involved in both transactions in a consulting role. Year on year, however, while the number of agreements for large amounts of space fell from eleven to six, the share of turnover posted by leases for 500 m² or less rose to about 64 per cent. Around 86,000 m² of space let fell into this size category.

Central Locations Account for 56 Per Cent of Dealss

Returning to their traditional places in the ranking of sub-markets, the central districts of City, HafenCity and City South accounted for 56 per cent of take-up of space at the end of the third quarter and 52 per cent of all agreements signed. First-placed City was far ahead of the other sub-markets, with 33 per cent of take-up (116,000 m²) and 36 per cent of all agreements. This good result was partly due to the owner-occupier transaction with Hamburg-Mitte Borough Council and four agreements for premises in the 2,001 to 5,000 m² size category. For example Thjnk, an advertising agency, rented 4,900 m² in the “BOA VISTA” project at Vorsetzen 32-39 and the financial consultancy Donner & Reuschel chose some 2,300 m² in the “Europa Passage” shopping mall. City South placed second with a share of about 15 per cent (54,000 m²), and HafenCity was third with around eight per cent (27,700 m²).

Local Government Plays Leading Role

Due to the City’s large transactions to obtain space for Hamburg-Mitte Borough Council and the four tax offices, local government/public offices accounted for around 24 per cent of total take-up, thus forming the biggest single group of new occupiers by the end of the 3rd quarter. Consulting firms were also very active on the market, accounting for around 17 per cent (60,000 m²) of lets.

Stable Average Rent

Year on year the premium office rent slipped back by 50 cents to €24.00/m²/month. Weighted by amount of space taken, the average rent stayed as it was in the prior year at €14.50/m²/month. In the past three quarters the largest share of take-up of space, some 20 per ent, fell to properties renting for between €12.51 and €15.00/m²/month.

Vacancy Rate Less Than Six Per Cent

Year on year the amount of space standing empty fell from around 839,800 m² to its current figure of about 740,300 m². At the end Q3, the vacancy rate, including sublet space, was a mere 5.6 per cent of the total stock of office space of 13.3m m².“Of the 20 biggest agreements concluded on the market for offices in Hamburg, seven related to project developments, three are under construction for owner-occupiers. The considerable demand for efficient office space offering new-build standards cannot be satisfied with the rate of completions seen so far. This year and in the coming year, 2016, some 48 projects are expected to add 388,000 m² to the total stock of office space. Contracts with new occupiers exist for 64 per cent of this space. Many firms are already reserving their office space in new projects. High-quality new-build projects have good chances on the rental market.

2015 Take-Up of 500,000 m² Predicted

Projected take-up for the year 2015 will be slightly lower than the year before. However, the market for office space in Hamburg is still in a phase of very dynamic growth. Many companies are planning strategic overhauls, which often involve moving to different premises. As these are complex processes, they may take quite a while to mature.
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source and further details:
www.grossmann-berger.de

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