The CORPUS SIREO “Regional Office Index” study confirms the continuing positive growth of German A- and B-locations on the office markets. In the 19 B-locations studied, asking rents were €8.73 per square metre at the end of the first half of 2017. This signifies an increase of 1.9% compared with the end of 2016. In the top seven cities, asking office rents increased by 2.1% to €13.97 per square metre in the same time period.
Rents for high-end spaces increasing considerably in B-cities
The rise in office rents in B-cities during the first half of 2017 was primarily due to growth in the high-end price segment but also in affordable properties. The majority of asking rents in B-locations were between €5.00 and €12.50 per square metre. However, the peak rate was above €18.00. New builds were offered for an average of €12.17 per square metre (+1.6% compared with the end of 2016), with the high-end office segment having grown in particular. The increasingly scarce “new build in a central location” property – the most expensive 20% of supply – averaged €14.30 per square metre (previous year: €14.00). An increasingly popular alternative to new builds are buildings from the post-1995 age category. Since the turn of the year, this segment has had the strongest growth: offices from this period average at €8.69 per square metre (+2.7%).
Top areas for rental growth in the south of the country
The leaders among B-locations come from the south of the country: in Freiburg, office space averaged at €11.96 per square metre in mid-2017. Mainz followed in second place with €10.91 per square metre. Mainz was also the location that had the strongest growth in the first half of 2017, with an increase of 13.4% in asking rents. Augsburg and Regensburg, where the average asking rents have risen by 9.0% since the end of 2016, were also in the top three.
Markets flagging in the east and north
Leipzig and Dresden remain – as they were at the start of the study in 2008 – the most affordable B-locations in Germany. In mid-2017, both of the cities in Saxony averaged €7.14 per square metre. Among the B-cities in eastern Germany, the asking rents in Potsdam, near Berlin, stood out. Here, the average rents were €10.07 per square metre and therefore approximately 15% higher than the average for all B-cities. In northern Germany, Kiel and Bremen fell into the lower third of the price range at €8.62 and €8.31 per square metre respectively. Hanover stays in the mid-table at €8.83 per square metre.
Munich remains strongest A-city, Berlin overtakes Hamburg
In the first half of 2017, Munich was at the top of the A-locations with an average asking rent of €16.80 per square metre (+2.2% compared with the end of 2016). Frankfurt am Main followed as the second most expensive A-location in Germany. Berlin is continuing to boom – the average asking rents in the office market in Germany’s capital increased by a strong 6.1% to €13.74 per square metre in the first half of 2017. Therefore, Berlin has overtaken Hamburg for the first time since the “Regional Office Index” was launched in 2008 (€13.07 per square metre, +0.9%).
Focal city Freiburg Germany’s most expensive B-Location
With approximately 226,000 inhabitants, Freiburg is among the smaller B-cities. The total office stock in the office market amounts to around 1.35 million square metres. However, the market is growing steadily and seeing a strong level of demand as 20,000–30,000 square metres of office space on the Freiburg rental market change hands every year. In recent years, the vacancy rate has been at a low level of 2%. However, with an average asking rent of €11.96 per square metre, Freiburg was the most expensive B-location in Germany in the first half of 2017. Rents range from €8.00 to €16.90 per square metre and at the top of the range, offices are on offer for more than €18.00 per square metre. Freiburg is known for its cluster in new energies and environmental technology. The “Green City” is also an important location for higher education and research, with approximately 35,000 students.
The 13th edition of the “Regional Office Index” study is now available. It is carried out by CORPUS SIREO, the German property subsidiary of Swiss Life Asset Managers, and the Bonn-based research institute empirica. The object of investigation is the development of asking rents in 19 regional cities (Augsburg, Bonn, Bremen, Darmstadt, Dortmund, Dresden, Essen, Freiburg, Hanover, Karlsruhe, Kiel, Leipzig, Mainz, Mannheim, Münster, Nuremberg, Potsdam, Regensburg and Wiesbaden) and the top seven cities (Berlin, Cologne, Düsseldorf, Frankfurt, Hamburg, Munich and Stuttgart). The focal city of the latest study is Freiburg.
The full report is available as a free download at https://www.corpus-sireo.com/de-de/presse/publikationen/studien
Yvonne Hoberg, Public Relations
Telephone: +49 221 39 90 0 120
About CORPUS SIREO
CORPUS SIREO is a multi-disciplinary real estate service provider which has received numerous awards. The company operates as a fund and asset manager, investor and project developer in Germany and other European countries. It also acts as a co-investment partner for pan-European real estate investments. CORPUS SIREO employs approximately 530 staff at 11 locations in Germany and Luxembourg, and is part of Swiss Life Asset Managers. With companies in Switzerland, France and Germany, Swiss Life Asset Managers manages real estate assets with a total value of approx. 68 billion Euros (as of 30.06.2017).
CORPUS SIREO manages special funds with a current volume of 2.3 billion euros. The company has expertise and its own presence in the German regional markets as well as in the health real estate sector, where the company is one of the German market leaders.
Swiss Life Asset Managers
Swiss Life Asset Managers has almost 160 years of experience in managing the assets of the Swiss Life Group. This insurance background has exerted a key influence on the investment philosophy of Swiss Life Asset Managers, which is governed by such principles as value preservation, the generation of consistent and sustainable performance and a responsible approach to risks. Swiss Life Asset Managers offers this proven approach to third-party clients in Switzerland, France, Germany and Luxembourg.
As at 30 June 2017 assets under management for third-party clients amount to EUR 49 billion. Together with insurance mandates for the Swiss Life Group, total assets under management at Swiss Life Asset Managers stood at EUR 191.7 billion.
Swiss Life Asset Managers is the leading real estate asset manager in Europe1. Of the assets totaling EUR 191.7 billion, EUR 42.5 billion is invested in real estate. In addition, Swiss Life Asset Managers has real estate under administration of EUR 25.4 billion through its subsidiaries Livit and Corpus Sireo. Total real estate under management and administration at the end of June 2017 thus came to EUR 67.9 billion.
Swiss Life Asset Managers employs about 1500 people in Europe.
1 PropertyEU, 100 top investors, October 2015, 2016, 2017