office market overview - jll€¦ · office market overview big 7 | 1st quarter 2020 published in...

Office Market Overview

Big 7 | 1st quarter 2020 Published in April 2020

Completions and Vacancy Rate Big 7

The lockdown begins to leave its mark on the off ice lettings market

Germany is on high alert, not only in terms of people’s health but also with regard to the economy. An unprece-dented lockdown has forced the domestic economy to grind to a halt, and the outcome is still uncertain. In Ger-man, the word ‘luv’ refers to the windward side of a ship. The degree to which the economy is knocked off course by the current pandemic will determine whether its recovery takes an “L”, “U” or “V” form. We will only fi nd out which for-mation we are heading for in the next weeks or months, when the full extent of the recession becomes known and government rescue packages are in place. Right now, acute crisis management, or the capacity of companies to act, is paramount.

It is therefore not surprised to see that companies from al-most all sectors (trade, services and construction) have stopped recruiting new staff or have put recruitment plans on hold. It is no coincidence that the Ifo employment ba-

rometer fell by 4.6 to 93.4 points in March, the biggest drop since this key economic indicator came into being. Econom-ic institutes are now largely anticipating a signifi cant de-cline in economic output to varying degrees, at least in the next two quarters. Hurriedly launched government rescue programmes are designed to alleviate more acute setbacks. In particular, the multi-billion-euro “economic stabilisation fund” is intended to strengthen companies by providing capital and guarantees. If necessary, the state should be able to invest in companies, as was the case during the fi -nancial crisis more than ten years ago. There are also emer-gency loans for businesses and a support package for the self-employed and small businesses. In addition, the short-time working model that was used quite successfully in the fi nancial crisis has been implemented again.

At the beginning of March, we were still talking about falling unemployment and a high number of vacancies, while

Off ice Market Overview | 1st quarter 2020 2

v

-366,000 sqmVacancy

compared to last year


short-term work was practically non-existent. Since then, there has been a complete turnaround. The last two weeks in March marked a historic turning point. More than 470,000 companies submitted applications for short-time work by 27 March alone and gone up to 725,000 by mid of April. This increase could of course be quickly slowed down or re-versed if the economic lockdown is eased, but since infec-tion rates are still rising rapidly then the economy is likely to remain in emergency operation mode at least during April. For comparison: during the fi nancial crisis, short-time work-er applications peaked in July 2009 at just over 61,000. The diff erence in the fi gures illustrates the dramatic macroeco-nomic recession we are currently dealing with.

Demand for off ice space falls signifi cantly compared to the previous yearThis cannot fail to have consequences for the commercial of-fi ce lettings markets. Here too, the second half of March clear-ly illustrates how the off ice market has changed aft er the spread of the coronavirus. It would be pure speculation and therefore pointless to say how this might look in future. Look-ing at the cold fi gures for the fi rst quarter of 2020, it can at least be said that the lettings markets would have declined even without the coronavirus, since fi rst signs of a somewhat subdued market were already evident at the end of last year.

Total take-up for the Big 7 (Berlin, Cologne, Düsseldorf, Frank-furt, Hamburg, Munich, Stuttgart) amounted to 701,000 sqm in the fi rst quarter of 2020, corresponding to a 30% decline on a 12-month basis. This represents the weakest three-month period in terms of take-up since Q3 2014. The fi gure is also 15% below the 10-year average for fi rst quarters.

None of the seven property strongholds emerged un-scathed from the general downturn, which is unusual given

Prime Rental Index and Take-up Big 7

Prime Rent Q1 2020compared to last year

+4.6 %

that the trend has generally been upwards in the past 10 years. Munich was again the market leader with take-up of 184,000 sqm and a moderate reduction of 6%. Cologne and Stuttgart experienced the sharpest declines of 60% and 61% respectively. Even Berlin, which has become accus-tomed to success, registered a drop of around a quarter to 172,000 sqm.

What will happen next?

More than 50% of companies surveyed for the new JLL-Thermometer that was developed at the end of March fear that the health crisis will have a major and lasting impact on their core business. The possible eff ects for off ice mar-kets could be that space requirements are mostly reduced. The coronavirus crisis is already having an impact on cur-rent deliberations about new lease contracts or lease exten-sions. More than half of the companies surveyed confi rmed that decisions were being postponed. Put in positive terms, a postponement does not mean that a relocation or rental plan will fall through. As the crisis progresses, space optimi-sation measures are likely to become increasingly impor-tant, also in view of the fact that home working could be-come a permanent option for more and more employees. This could infl uence adjustments of existing space, for ex-ample through sublease contracts, as well as price renegoti-ations of current tenancy agreements. In the current eco-nomic situation it should be constantly emphasised that it is deemed appropriate for both sides – owners and users — to come up with sensible and sustainable solutions.

Vacancies stabilise at a low levelAft er dropping signifi cantly from quarter to quarter in recent years, vacancies now seem to have reached a low point: at the end of the fi rst quarter of 2020, a total of 2.85 million sqm was available to companies seeking off ice space in the Big 7. This represents a reduction of more than 11% com-pared to the previous year. The vacancy rate averaged across all strongholds remains at 3%. Until now, before the spread of COVID-19, the volume of new off ice space was the only factor that was expected to infl uence vacancy levels this year. A drop-off in demand was not part of the plan. This is now likely to change. It can be assumed that vacancy rates will increase in the coming months owing to the di-minishing rate of demand. The topic of sub-letting could also be back on the agenda for off ice users.

Completions volume set to fall In the fi rst quarter of 2020, off ice space completions amount-ed to a total of almost 220,000 sqm. This still represents only a very moderate new-building volume. The high proportion of pre-let space only serves to highlight the need for modern and well-equipped space. Or to put it another way: only 6% of the 220,000 sqm was still available at the time of comple-tion. This demonstrates that the rental market is still on the move and that new contracts are also being signed. It re-mains to be seen to what extent the positive trend of pre-let-ting in off ice developments will continue. Last but not least, it also depends on whether planned off ice developments or those under construction are postponed or even put on hold. A ban on personal contact, confi nement measures and re-strictions on off ice work are already having a massive impact on construction processes. For the next three quarters, a total of around 1.55 million sqm is still in the pipeline in all seven strongholds, and is already under construction. The majority of this space is already pre-let, although most contracts were signed well before March 2020. Only around 386,000 sqm or a quarter of the total volume is still available to companies seeking new off ice space. The pipeline is currently still full for



the next few years. However, we assume that not all new construction projects will be realised. In the event of an overall decrease in demand, pre-letting rates will also fall, and this can also cause projects to be halted if fi nancing is based on such quotas being reached.

Prime rents remain stable in the Big 7 At the end of the fi rst quarter, there was suff icient evidence that prime rents in all seven strongholds could be left at the same level as in the last quarter of 2019. The JLL prime rental index remained at 218.1 points on a quarterly basis, which still represents the highest level since 1992, although year-on-year growth was 4.6%. Assuming that the cycle has reached its peak, it is worth comparing it to the last cycle peak and the subsequent global fi nancial crisis. The current index value is as much as 32% above the previous high point in the fourth quarter of 2008. It could be assumed that there is high poten-tial for this to fall. However, it should not be forgotten that

during the boom phase up to the fi nancial crisis at the end of 2008, the average vacancy rate in the Big 7 dropped to 8.6%. This time, however, the shortage of space is much more ex-treme and thus props up rental prices.

Aft er the fi nancial crisis, the rental price index declined over seven quarters before the recovery started. The total decrease was only 5% at that time, with the most pronounced declines occurring in 2008-2010 in Berlin (-10%, from €22 to €20) and in Frankfurt (-9%, €37 to €33). The next few weeks will bring more precise information about the willingness of off ice tenants to sign deals, concessions made by landlords in terms of deferrals and the granting of incentives with corresponding consequenc-es for actual rents. Many predominantly smaller companies have already started renegotiating with their landlords. We cur-rently do not see any such activities at large corporates. Reloca-tion issues and the importance of off ice space are part of a long-term strategy that is not quickly abandoned.

Off ice Space Take-up incl. Owner Occupier (sqm)

2019 Q1 2019 Q1 2020 %

Berlin 1 998,500 230,800 172,000 -25.5

Düsseldorf 2 549,900 112,100 108,100 -3.6

Frankfurt/M 3 579,500 104,200 67,600 -35.1

Hamburg 4 530,000 178,500 98,000 -45.1

Cologne 5 291,300 95,400 38,500 -59.6

Munich Region 6 760,000 196,100 184,000 -6.2

Stuttgart 7 319,000 85,500 33,100 -61.3

Total 4,028,200 1,002,600 701,300 -30.1

Office Market Overview | 1st quarter 2020 6

1 City Area; 2 City Area incl. Ratingen, Neuss, Erkrath and Hilden; 3 City Area incl. Eschborn and Kaiserlei; 4 City Area; 5 City Area; 6 City Area incl. surrounding areas; 7 City Area incl. Leinfelden-Echterdingen

Vacancy incl. Space for subletting

Q4 2019 Q1 2019 Q1 2020 %

m² Quote (%) m² Quote (%) m² Quote (%)

Berlin 1 376,500 1.8 387,900 1.9 387,500 1.9 -0.1

Düsseldorf 2 526,700 5.8 598,200 6.5 537,800 5.9 -10.1

Frankfurt/M 3 637,300 5.5 743,300 6.4 679,500 5.8 -8.6

Hamburg 4 452,400 3.0 529,600 3.5 372,900 2.5 -29.6

Cologne 5 168,000 2.2 230,000 3.0 167,600 2.2 -27.1

Munich Region 6 478,500 2.3 537,800 2.6 498,600 2.4 -7.3

Stuttgart 7 206,700 2.3 189,000 2.2 205,800 2.3 8.9

Prime Office Rents (€/sqm/month)

Q4 2019 Q1 2019 Q1 2020 %

Berlin 1 37.00 34.00 37.00 8.8

Düsseldorf 2 28.50 28.00 28.50 1.8

Frankfurt/M 3 41.50 40.00 41.50 3.8

Hamburg 4 29.00 28.00 29.00 3.6

Cologne 5 26.00 24.00 26.00 8.3

Munich Region 6 41.00 39.50 41.00 3.8

Stuttgart 7 24.50 24.00 24.50 2.1

Completions (in sqm)

2019 Q1 2019 Q1 2020 %

Berlin 1 237,300 74,700 91,900 23.0

Düsseldorf 2 115,400 1,600 1,300 -18.8

Frankfurt/M 3 130,300 0 21,000 n/a

Hamburg 4 117,100 16,500 24,200 46.7

Cologne 5 95,600 2,000 16,600 730.0

Munich Region 6 335,600 4,200 59,000 1,304.8

Stuttgart 7 92,700 61,300 5,500 -91.0

Office Space Stock (in Mill. sqm)

Q4 2019 Q1 2019 Q1 2020 %

Berlin 1 20.42 20.28 20.49 1.0

Düsseldorf 2 9.15 9.16 9.15 -0.2

Frankfurt/M 3 11.65 11.58 11.63 0.5

Hamburg 4 15.02 14.97 15.01 0.3

Cologne 5 7.79 7.71 7.79 1.0

Munich Region 6 20.63 20.37 20.69 1.5

Stuttgart 7 8.81 8.78 8.81 0.4

Off ice Market Overview | 1st quarter 2020 Berlin

Berlin

Marzahn

Rudow

Blankenburg

Kladow

Mitte

Pankow

Marienfelde

Wartenberg

Friedenau

Friedrichsfelde

Britz

Mahlsdorf

Westend

Wilmersdorf

Lankwitz

Köpenick

Steglitz

Falkenberg

Heinersdorf

Siemensstadt

Oberschöneweide

Moabit

Zehlendorf

Wannsee

Staaken

StadtrandsiedlungMalchow

Kaulsdorf

Alt-Treptow

Heiligensee

Wittenau

Gatow

Dahlem

FranzösischBuchholz

Schöneberg

Reinickendorf

Alt-Hohenschönhausen

Altglienicke

Wilhelmstadt

Friedrichshain

Wedding

GrunewaldKarlshorst

Weißensee

Buckow

Buckow

Biesdorf

Lichtenberg

Neukölln

Friedrichshagen

Adlershof

Haselhorst

Nikolassee

Niederschönhausen

Niederschöneweide

Tegel

Mariendorf

Rosenthal

Johannisthal

Baumschulenweg

Tempelhof

Kreuzberg

Waidmannslust

PrenzlauerBerg

Schmargendorf

Konradshöhe

Grünau

Lichterfelde

MärkischesViertel

Wilhelmsruh

Charlottenburg-Nord

Malchow

Neu-Hochenschönhausen

Hellersdorf

Fennpfuhl

Rummelsburg

Plänterwald

Hansaviertel

Tiergarten

Gesundbrunnen

Charlottenburg

Gropiusstadt

Halensee

Spandau

Hakenfelde

FalkenhagenerFeld

A 111

A 103

A 114

A 10

A 100A 115

A 113

GroßGlienicke

Charlottenburg-WilmersdorfFriedrichshain-Kreuzberg

Lichtenberg

Marzahn-HellersdorfMitte

Neukölln

Pankow

Reinickendorf

Spandau

Steglitz-Zehlendorf

Tempelhof-Schöneberg

Treptow-Köpenick

Berlin-Tegel

Eastern Suburb€ 10.00-27.50

Western Suburb€ 11.50-17.50

Southern Suburb€ 10.00-26.50 Adlershof

€ 10.00-18.50

Wilmersdorf-Schöneberg€ 16.00-29.50 Kreuzberg-Tempelhof

€ 15.00-30.50

Mediaspree€ 26.00-35.00

Charlottenburg-Tiergarten€ 17.00-28.00

PrenzlauerBerg-Friedrichshain

€ 17.50-28.00

Northern Suburb€ 11.00-18.00

Kladow

Berlin

Gatow

KonradshMalchow(Hohensch

Klarahoeh

Falkensee

Berlin: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q1

A113

A10 A13

Berlin-Schönefeld

Berlin-Schönefeld

BohnsdorfGroßziethen

Karlshof

Kiekebusch

Schönefeld

Selchow

Rotberg

Tollkrug

Waltersdorf

Kienberg

Waßmannsdorf

Dahlewitz

Glasow

Area Airport Berlin-Brandenburg€ 8.50-18.50

Wilmersdorf

Schöneberg

Tiergarten

Charlottenburg

Charlottenburg 1A€ 23.00-37.00

Area Potsdamer-Leipziger Platz€ 25.00-37.00

Mitte 1A€ 26.00-36.00

Area Main Station-Europacity€ 28.00-35.50

Mitte€ 21.00-34.00

Mitte

Moabit

Schöneberg

Wedding

Kreuzberg

PrenzlauerBerg

Hansaviertel

Tiergarten

Gesundbrunnen

Weak start to the year in the federal capitalThe Berlin off ice letting market began the year with a take-up volume of 172,000 sqm. This is a reduction of around 38% compared to the previous quarter and 20% lower than the fi ve-year average of respective comparative quarters. One of the reasons for this weak result was the strong year-end re-sult in 2019 with few deals pending completion in 2020. Once again, the main drivers of space take-up in the fi rst quarter of this year were high volume lettings. While the three largest transactions accounted for 20% of total take-up in the fi rst quarter of the previous year, they were responsible for 29% in the fi rst three months of the current year. Most of the quar-terly result was attributed to deals concluded in the > 10,000 sqm size category. On a local level, it is apparent that the new and centrally-located “Areal Hauptbahnhof-Europacity” submarket is attracting an increasing number of tenants. This can be attributed to the growing attractiveness of the lo-cation and the progressing project developments. Last year

alone, the supply of space in this submarket increased by around 45,000 sqm. In view of the current high level of con-struction activity there, it can be assumed that this trend will continue in the future. At the beginning of the year, the va-cancy rate in the federal capital was 1.9%. The prime rent was unchanged at €37.00/sqm/month compared to the pre-vious quarter, whereas the weighted average rent increased by 2.6% to €26.36/sqm/month.

Berlin: Off ice Space Market Areas with Rental Bands (€/sqm/month)

Development of Main Indicators

Off ice Market Overview | 1st quarter 2020 Düss eldorf

Düss eldorf

Strong start to the yearDüsseldorf’s off ice letting market recorded take-up of around 108,000 sqm in the fi rst quarter of 2020, slightly less space (4%) than in the same quarter of the previous year but above the fi ve- and ten-year averages for fi rst quarters; almost 93,000 sqm of this fi gure was taken up in the Düs-seldorf urban area. The number of leases concluded fell sharply year-on-year (25%), with most deals aff ected in the < 500 sqm size category. Four deals were registered in the > 5,000 sqm size category, two of which were concluded by the public sector which was thereby responsible for around a third of the total take-up. Although these deals also put it at the top of the ranking of industrial sectors, this sector’s average long-term share of take-up was just 7%. Manufac-turing companies (19%) and business-related service pro-viders (12%) followed in second and third place, albeit at some distance behind. One of the four top deals was con-cluded by an owner-occupier, LEG Management GmbH,

which is constructing around 7,600 sqm in Airport City. The vacancy rate remained below 6% in the fi rst quarter and the fi gure is just 4.7% in the Düsseldorf urban area. Most vacant space can be found in the peripheral Neuss and Rat-ingen submarkets. The prime rent remained stable in the fi rst three months of the year at €28.50/sqm/month and was achieved in the CBD, whereas the weighted average rent increased slightly by around 1% to €17.42/sqm/month in the same period.

Düsseldorf: Off ice Space Market Areas with Rental Bands (€/sqm/month)


Hubbelrath

Benrath

Stadtmitte

Niederkassel

Rath

Unterbach

Flingern Süd

Oberkassel

Oberbilk

KalkumKalkum

Lierenfeld

Pempelfort

Stockum

Mörsenbroich

Hamm

Wersten

Flingern Nord

Holthausen

Heerdt

Flehe

Lichtenbroich

Friedrichstadt

Schöller-Dornap

Eller

Itter

Lohausen

Derendorf

Volmerswerth

Gerresheim

Himmelgeist

Ludenberg

Düsseltal

Reisholz

Lörick

Carlstadt

Unterrath

Unterbilk

Vennhausen

Hassels

Kaiserswerth

Golzheim

Fischeln

Bilk

Grafenberg

Altstadt

Hafen

Knittkuhl

A 3

A 52

A 59A 46

A 44

A 44

A 57

A 52

A 46

A 3

Rhein

Rhein

Düsseldorf

City-East€ 9.50-12.50

Airport€ 11.00-17.50

Grafenberg-East€ 9.00-14.50

Harbour€ 14.50-25.00

Kennedydamm€ 14.50-23.50

North€ 8.00-17.00

Ratingen€ 8.00-15.50

Seestern€ 9.50-14.50

South€ 8.00-11.50

Linksrheinisch€ 7.00-20.00

Neuss€ 7.00-9.50

Erkrath/Hilden

Düsseldorf

Ludenberg

Himmelgeist

Unterbach

Solingen

Unterfeldhaus

Erkrath

Gruiten

Haan

Kalster t

Hilden

Metzkausen

Met tmann

Niederschwarzbach

RatingenRohdenhaus

Kaarst

Langstkierst

Meerbusch

Lank-Latum

StruempIlverich

Holzheim

Grefrath

Neuss

Stadtmitte

Oberkassel

Oberbilk

Pempelfort

Friedrichstadt

Carlstadt

Unterbilk

Bilk

Altstadt

Hafen

Rhein

City-South€ 8.00-11.00

City€ 9.00-26.00

CBD Düsseldorf€ 17.00-28.50

Government District€ 11.50-21.00

Düsseldorf: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q1

Off ice Market Overview | 1st quarter 2020 Frankfurt

Frankfurt

Low space take-up in the fi rst quarterTake-up in the fi rst quarter of 2020 was just 67,600 sqm, the fourth worst quarterly take-up result for more than 20 years. This was mainly due to the low deal overhang from the previous year, as the fourth quarter of 2019 was the third strongest quarter in the last ten years, and to the eff ects of the current coronavirus crisis. In contrast, the number of deals was comparatively high, since mainly medium and large-sized searches for space were post-poned. The vacancy rate rose slightly to 5.8% due to numerous vacancies resulting from contracts signed in 2018 and 2019. Across the submarkets, prime and average rents remained unchanged. In the current economic climate, owners and (existing) tenants are engaged in intensive exchanges and solutions are being sought inthe form of incentives, subletting or fl exible contractual arrangements. In the short term, many companies will focus on creating or improving their remote working

infrastructure; these investments will also have an impact on space concepts in the medium and long-term. If the catch-up eff ects come in the second half of the year, over-all performance in 2020 could remain strong, provided that there is enough time for deals to be concluded and that property owners do not put together too attractive lease extension packages.

Frankfurt: Off ice Space Market Areas with Rental Bands (€/sqm/month)


Kalbach

Westend-Nord

Heddernheim

Seckbach

Gutleutviertel

Preungesheim

Bonames

Bockenheim

Gallusviertel

Unterliederbach

Bergen-Enkheim

Griesheim Oberrad

FrankfurterBerg

Fechenheim

Niederrad

Innenstadt

NiedHöchst

Westend-Süd

Praunheim

Berkersheim

SossenheimNordend-Ost

Dornbusch

Sachsenhausen-Nord

Ostend

Eckenheim

Hausen

Bahnhofsviertel

Riederwald

Sachsenhausen-Süd

Eschersheim

Sindlingen

Altstadt

RödelheimBornheim

Schwanheim

Harheim

Flughafen

Ginnheim

Zeilsheim

Niederursel

Nordend-West

B 3

A 66

B 40

A 661;B 3

A 648

A 661

A 5

A 3

A 661

A 3

A 66

A 66

Main

Main

Frankfurtam Main

Eschborn€ 9.00-17.50

Kaiserlei€ 8.00-16.00

Mertonviertel-Riedberg€ 10.00-15.00

Lyoner Quartier€ 10.00-17.00

North€ 11.50-16.50

East€ 10.00-18.50

Rödelheim€ 9.00-13.50

Sachsenhausen€ 11.50-17.00

West€ 9.50-28.00

Airport€ 16.00-25.00

Other City Locations (North)

Other City Locations (South)

Frankfurtam Main

OberradZeilsheim

Seckbach

HarheimKalbach

Of fenbacham Main

Kelsterbach

Raunheim

SchneidhainTs.

KönigsteinOberhoechstadt/Ts.Kronberg Oberursel

Ste inbach

Mitte lbuchen

HanauDoernigheim

Wachenbuchen

Mainta l

BischofsheimBad Soden

Altenhain

Eschborn

Okrifte l

Eddersheim

Hattersheim

Hofheim

Kelkheim

Krifte l

Schwalbach

Dreie ich

Heusenstamm

Rembruecken

Laemmerspie l

Mühlheim

Gravenbruch

Zeppelinheim

Neu-Isenburg

Obertshausen

Rodgau

Bad Vilbel

Westend-Nord

Gutleutviertel

Bockenheim

Gallusviertel

Niederrad

InnenstadtWestend-

Süd

Nordend-Ost

Sachsenhausen-Nord

Bahnhofsviertel

Sachsenhausen-Süd

Altstadt

Nordend-West

êêA648

Main

Central Station Area€ 12.00-24.00

Banking District€ 19.00-41.50

City€ 13.00-30.00

City-West€ 13.00-18.50

Westend€ 16.00-33.00

Westhafen€ 18.00-25.50

Frankfurt: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q1

Off ice Market Overview | 1st quarter 2020 Hamburg

Hamburg

Absence of major deals on the letting marketAround 98,000 sqm of space was let or secured by owner-occupiers in the Hamburg off ice letting market in the fi rst quarter, 30% and 20% below the fi ve- and ten-year averag-es, respectively. A higher take-up result was not possible due to the absence of major contracts: the two largest contracts were each concluded for units with less than 6,000 sqm. The City Centre and Port Fringe submarkets recorded the highest take-up, accounting for over 40% of the total re-sult. In terms of industrial sectors, business-related service providers (19,000 sqm) assumed fi rst place in the rankings as usual, followed by three sectors (construction and real estate, education, health and social services, and manu-facturing), all of which accounted for around 10,000 sqm of take-up. Flexible off ice space providers rented around 7,000 sqm in three locations, including IWG at Jungfern-stieg for the Signature brand. The vacancy rate fell to 2.5% in the fi rst quarter, refl ecting the current supply shortage;

however, more subleased space is expected to come onto the market in the near future as a result of the current coro-navirus crisis. Coupled with a weakening in demand, this will lead to a narrowing of the gap between supply and demand in tenants’ favour. Just 15% of the around 190,000 sqm of off ice space to be completed in 2020 is still available to the market and even less space will be completed next year, but an increase in the supply pipeline is expected in 2022. The prime and average rents remained stable at €29.00/sqm/month and €17.74/sqm/month, respectively.

Hamburg: Off ice Space Market Areas with Rental Bands (€/sqm/month)


Uhlenhorst

Bahrenfeld

Rothenburgsort

Borgfelde

Iserbrook

Steinwerder

Alsterdorf

Wandsbek

Lokstedt

Niendorf

Wellingsbüttel

Marienthal

Billstedt

Hohenfelde

Eppendorf

Eidelstedt

Harvestehude

St. Georg

Veddel

Barmbek-Nord

Ohlsdorf

Osdorf

Fuhlsbüttel

Rotherbaum

Bramfeld

Jenfeld

Stellingen

Schnelsen

Billbrook

Nienstedten

Altona-Altstadt

KleinerGrasbrook

Farmsen-Berne

Neustadt Horn

Eilbek

Altona-Nord

St. Pauli

Volksdorf

Barmbek-Süd

Othmarschen

Sasel

Hoheluft-Ost Dulsberg

Winterhude

Tonndorf

Finkenwerder

Lurup

Groß Flottbek

Hammerbrook

Hummelsbüttel

Eimsbüttel

Steilshoop

Waltershof

Ottensen

Groß Borstel

Rahlstedt

Hamburg-Altstadt

Hamm

Hoheluft-West

Sternschanze

HafenCity

A 24

A 7

A 23

A 1

Süder Elbe

Elbe

Norder Elbe

Hamburg

Altona-Ottensen-Bahrenfeld€ 12.00-17.50

Barmbek /Bramfeld

€ 10.00-15.50

Bergedorf€ 9.00-15.00

Billbrook /Billwerder /

Billstedt€ 6.00-12.50

City Nord€ 9.50-15.00

City Süd (Outer Zone)€ 9.00-12.50City Süd

(Core Area)€ 9.50-16.00

Eimsbüttel€ 10.00-14.50

Eppendorf /Harvestehude /

Rotherbaum€ 12.50-22.00

Airport /Groß Borstel€ 9.00-13.50

HafenCity€ 16.00-26.00

Harbour fringe€ 13.50-22.50

Hamburg-West€ 9.00-12.50

Hamburg North-East€ 9.00-12.50

Harburg - south of the river Elbe€ 9.00-14.50

City Centre€ 14.50-29.00

East of Alster /St. Georg

€ 12.50-21.50St. Pauli€ 12.00-22.50

Wandsbek€ 9.00-14.50

Winterhude /Uhlenhorst

€ 10.00-14.50

Halstenbek

Puet jen

Schenefeld

Barsbütte l

Hamburg

Hamburg: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q1

Off ice Market Overview | 1st quarter 2020 Cologne

Cologne

Market characterised by a lack of available space The Cologne off ice letting market got off to a very slow start to the year, recording take-up of a mere 38,500 sqm in the fi rst three months of 2020, 60% lower than in the fi rst quarter of last year. The number of deals concluded fell by 31% and both the volume of take-up and number of deals only managed to reach half of the fi ve-year average. This below-average result was not due to weak demand from companies, but rather to the lack of available and especially modern and high-specifi cation off ice space. With a current vacancy rate of just 2.2%, many searches for space cannot be satisfi ed. Just 11% of the available space is of a top quality fi t-out specifi cation. No high-volume deals were registered in the fi rst quarter: so far this year, the largest lease was concluded by a company from the health sector which signed a contract for 4,500 sqm in the Ehrenfeld/Braunsfeld submarket. Just eight deals in the four-digit range were concluded; the


Rondorf

BuchforstNeustadt-Nord

Klettenberg

Eil

Merheim

Hahnwald

Ehrenfeld

Zündorf

Niehl

Urbach

Raderberg

Rath/Heumar

Müngersdorf

Stammheim

Lindweiler

Westhoven

Vingst

Bocklemünd/Mengenich

Altstadt-Nord

Nippes

Buchheim

Deutz

Sülz

Rodenkirchen

Neuehrenfeld

Weidenpesch

Elsdorf

Raderthal

Neubrück

Junkersdorf

FlittardPesch

Ensen

Wahnheide

Höhenberg

Ossendorf

Lövenich

Mauenheim

Holweide

Bayenthal

Lindenthal

Höhenhaus

Weiß

Humboldt-Gremberg

Bickendorf

Longerich

Altstadt-Süd

Godorf

Grengel

Zollstock

Mülheim

Weiden

Meschenich

Esch/Auweiler

Gremberghoven

Ostheim

Widdersdorf

Riehl

Dellbrück

Porz

Marienburg

BrückBraunsfeld

Heimersdorf

Dünnwald

Poll

Kalk

Sürth

Vogelsang

Bilderstöckchen

Neustadt-Süd

ImmendorfImmendorf

Finkenberg

L 124

L 84

A 1

A 3;A 4

A 555

A 3

A 4

A 1

A 3A 59

A 57

A 559

A 4

Rhein

Köln/Bonn

Bayenthal/Marienburg€ 9.00-16.00


Deutz/Messe

€ 8.00-20.00

Ehrenfeld/Braunsfeld

€ 6.50-15.50

Kalk/Mülheim

€ 7.00-16.00

Lindenthal/Sülz

€ 8.00-15.00

Ossendorf/Nippes

€ 6.50-14.00

Peripherie West€ 7.00-12.50

Porz/Gremberghoven

€ 8.50-13.50

Rhinebank-West€ 13.00-26.00

Rodenkirchen€ 7.00-11.00

Other Locations

Auweiler

Marsdorf

Konraderhoehe

Widdersdorf

Hardt

Köln

Rath

Frechen

Buschbell

BerrenrathHürth

Gleuel

Brauweiler

Pulheim

BergischGladbach

Bensberg

Forsbach

Rösrath

Cologne: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q1Cologne: Off ice Space Market Areas with Rental Bands (€/sqm/month)

average deal size was 500 sqm. Following a signifi cant increase in 2019, the prime rent remained stable at €26.00/sqm/month in the fi rst quarter of 2020, while the weighted average rent was almost unchanged year-on-year at €15.54/sqm/month.

Off ice Market Overview | 1st quarter 2020 Munich

Munich

Supply shortage continues to dominate the off ice marketTake-up of around 184,000 sqm was recorded as a result of lettings or deals by owner-occupiers in the Munich off ice letting market in the fi rst quarter, approx. 27% more than in the previous quarter and 6% less than in the corresponding period last year. With a total volume of around 50,000 sqm, the three largest lettings accounted for 27% of the total take-up to date. Although the highest number of transactions (approx. 20%) were concluded in the City Centre, the East submarket recorded the highest volume of take-up of around 63,000 sqm.

The vacancy rate in the fi rst quarter of 2020 was 2.4%, 0.1 percentage points above the level of the previous quarter and was mainly due to an increase in the volume of space available for subletting. Around 59,000 sqm of off ice space was completed between January and March 2020 and a further 349,400 sqm of completions are

Munich: Off ice Space Market Areas with Rental Bands (€/sqm/month)


Arabellapark€ 17.50-23.50

Bogenhausen€ 20.00-30.00


Moosfeld/Riem

€ 10.00-17.00

Neuperlach€ 12.00-17.50

North€ 14.00-21.00

North-Schwabing€ 16.50-26.00

Olympiapark€ 14.00-22.00

East€ 15.50-30.00

South€ 12.00-21.00

West€ 15.50-23.50

Westend€ 16.50-25.00

A 8

A 95

A 9

A 995

A 99

A 8

A 99

A 94

A 96

A 99

A 99

Bogenhausen

Aubing-Lochhausen-Langwied

Obergiesing

Altstadt-Lehel

Maxvorstadt

Thalkirchen-Obersendling-Forstenried-Fürstenried-Solln

Berg am Laim

Sendling-Westpark

Allach-Untermenzing

Moosach

Untergiesing-Harlaching

Hadern

Schwabing-West

Sendling

Trudering-Riem

Schwabing-Freimann

Schwanthalerhöhe

Feldmoching-Hasenbergl

Pasing-Obermenzing

Au-Haidhausen

Ramersdorf-Perlach

Laim

Neuhausen-Nymphenburg

Ludwigsvorstadt-Isarvorstadt

Milbertshofen-AmHart

MünchenRiem

Karlsfe ld

Rothschwaige

Parsdorf

Vaterstetten

Grub PoingEichenau

Germering

Gröbenzell

Olching

Neu-Esting

Puchheim

Gräfelf ing

Grünwald

Ot tendichl

Haar

Ismaning

Heimstetten

Kirchheimb. München

Oberschleißheim

Ot tobrunn

Planegg Martinsried

Neubiberg

Unterhaching

Stockdorf

UnterbrunnGauting

Munich: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q1

expected by the end of the year, with just 40,000 sqm (14%) of this still available to the market.

The continuing low and further decline in the supply of space and sustained high demand in the market has caused rents to rise over many years. In the fi rst quarter of 2020, the prime rent was unchanged at €41.00/sqm/month and the average rent rose to €21.50/sqm/month. In the Munich ur-ban area, the average rent is currently €23.72/sqm/month.

Off ice Market Overview | 1st quarter 2020 Stutt gart

Stutt gart

Below-average start to the yearAt the beginning of the year, the Stuttgart off ice letting market saw its volume of take-up fall by 61% to 33,100 sqm compared to the corresponding period last year. This result is around 57% below the fi ve-year average of fi rst quarters, but the number of deals is similar to that recorded in the same period last year. This is because many large users have already secured space with long lease terms and is also due to the low supply of available larger premises. As a result, the < 500 sqm size category was the most popular, accounting for around 70% of transactions. The largest transaction was concluded by the fl exible off ice space provider REGUS with almost 2,800 sqm in the peripheral Leinfelden-Echterdingen submarket. With a share of around 34%, the City submarket recorded the highest volume of take-up and accounted for around half of all deals. Vaihingen-Möhringen followed with around 23%. The most active demand group by far was business-related service providers who were responsible for

around 41% of the take-up result. On the supply side, all of the approx. 5,500 sqm of the off ice space completed in the fi rst quarter was already occupied and therefore no new off ice space was released onto the market. Despite a slight drop in the volume of vacancies, the vacancy rate remains at 2.3% and the prime rent is unchanged at €24.50/sqm/month.

Stuttgart: Off ice Space Market Areas with Rental Bands (€/sqm/month)


A 831

A 8

A 81

A 81

A 8

A 8;A 81

A 8

Stuttgart-Ost

Birkach

Stammheim

Untertürkheim

Münster

Sillenbuch

Zuffenhausen

Hedelfingen

Möhringen

Stuttgart-Süd

Vaihingen

Obertürkheim

Bad Cannstatt

Stuttgart-West

Feuerbach

Stuttgart-Nord

Wangen

Plieningen

Weilimdorf

Mühlhausen

Degerloch

Botnang

Mitte

Stuttgart

Bad Cannstatt€ 11.00-19.00

Degerloch€ 10.50-20.00

Fasanenhof€ 11.50-18.00

Feuerbach€ 13.50-19.50

Leinfelden-Echterdingen€ 11.00-19.00

Plieningen€ 9.00-11.00

Stuttgart-North€ 15.00-20.00

Stuttgart-East€ 10.50-18.00Stuttgart-South

€ 10.50-17.00

Stuttgart-West€ 15.00-20.00

Weilimdorf€ 11.00-16.50

Zuffenhausen€ 10.00-16.50

City€ 15.50-24.50

Unter-Obertürkheim/Wangen-Hedelfingen

€ 10.50-16.50

Vaihingen-Möhringen€ 13.50-20.00 Hoffe ld

Stuttgart

Dagersheim

Böblingen

Leonberg

GebersheimHoefingen

Warmbronn

Rutesheim

Sindelfingen

Denkendorf

Esslingenam Neckar

Neuhausenauf denFildern

Plochingen

Wendlingenam Neckar

Wernau(Neckar)

BernhausenLeinfe lden-Echterdingen

Kemnat

Ostf ildern

Hirschlanden

Ditz ingen

Gerlingen

Korntal-Münchingen

Neuwir tshaus

Fellbach

Korb

Kleinheppach

Beinste in

NeustadtRems-Murr-Kreis

Waiblingen

Remshalden

Struempfelbach

Schnait

WeinstadtKernen

im Remstal

Stettenim Remstal

Magstadt

Stuttgart: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q1

Helge ScheunemannHead of Research Germany+49 (0) 40 350011 [email protected]

Contact DüsseldorfMartin BeckerSenior Team Leader Office Leasing+49 (0) 211 13006 [email protected]

Contact FrankfurtMarkus KullmannRegional Manager Frankfurt+49 (0) 69 2003 [email protected]

Contact HamburgAndré HoffmannSenior Team Leader Office Leasing+49 (0) 40 350011 [email protected]

Contact CologneAndreas ReulTeam Leader Office Leasing+49 (0) 221 2775 [email protected]

Contact MunichFritz Maier-HartmannSenior Team Leader Office Leasing+49 (0) 89 290088 [email protected]

Contact StuttgartSebastian TreierTeam Leader Office Leasing+49 (0) 711 900370 [email protected]

Contact Berlin Gerald DietzoldSenior Team Leader Office Leasing+49 (0) 30 203980 [email protected]

Copyright © JONES LANG LASALLE SE, 2020. No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. It is based on material that we believe to be reliable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty that it contains no factual errors. We would like to be told of any such errors in order to correct them.

Contacts

jll.de Information regarding JLL and our servicesjll.de/research All research reports on current market figures and special topicsjll.de/immo Commercial real estate properties for sale or to let througout Germany

Stephan LeimbachHead of Office Leasing Germany, Member of the JLL Strategy Board Germany+49 (0) 69 2003 [email protected]

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