Gif presents the results of the 2009 Office Market Survey German Office Markets in the Downturn

The total take-up in the seven major office markets traditionally analysed by gif was 2.3 million sq m in 2009. This is about 26% down on the 2008 result (3.1 million sq m) and only slightly more than the take-up in 2004. Following the record year of 2007 (3.4 million sq m), take-up has therefore declined for the second consecutive year. The figures for 2009 provide further evidence that take-up moves in synchrony with the weak trend of the economy. The Arbeitskreis Marktanalysen und Bedarfsprognosen (market analysis and demand forecasting working group) of the Gesellschaft für Immobilienwirtschaftliche Forschung e. V. (gif - the German Society of Property Researchers) came to this conclusion based on its moderation of discussions by leading real estate advisors on the key market figures for 2009. Rents and vacancy have followed similar negative trends to that of take-up. Declines were registered, in both top rents and average rents, in almost all locations. The only exceptions were Stuttgart (top rents unchanged at 18 € per sq m per month), Düsseldorf (average rent up by 0.20 € to 13.70 €) and Frankfurt (17.50 rising to 20 €). "Such a short-term rise in average rents is not unusual in declining markets", explains Ursula Neisser, of DTZ Zadelhoff, who was in charge of carrying out this year's survey. “However, they reflect firms’ efforts to secure space in very good locations at rents relatively cheaper than before”. Vacancy has risen in all locations, again with the exception of Stuttgart. In the individual rounds of discussions it was also reported that, looking ahead to 2010, there were no concerns about excessive quantities of newly-completed space coming onto the market in the short term. "The German office markets are fundamentally in good shape: for the coming year we do not anticipate a rapid increase in overcapacity of newly-developed space, as was last seen in 2002 " continues Neisser.

As is now traditional, the survey includes owner-occupier transactions in all the markets. Although down by almost 32%, Munich once again registered the highest take-up, 453,000 sq m, followed as before by Berlin (444,000 sq m, down 9.4%). Düsseldorf registered the largest decline in take-up (243,100 sq m, down 42.7%), while Stuttgart once again came off best, with a decline of only 5.9%.

As at the end of the year, gif assessed the total current vacancy in the seven office markets to be around 7.59 million sq m. In relation to the total office stock of the cities analysed, this is equivalent to a vacancy rate of 9.2%. It therefore represents a continuing increase on the previous year's figure (2008: 8.6%). "Nevertheless, the rise in vacancy is ever-increasingly driven by structural aspects (i.e. older space) rather than by new developments. Vacancy must therefore be expected to increase further in the current year", gif considers. (Because of the increase in the number of locations surveyed and the consequent difficulty in comparing historic data series, detailed figures are provided in the appendix.)

Despite the expected darkening of the overall market situation, the gif working group can report some pleasing news. Dr. Thomas Beyerle, Leader of the gif market analysis and demand forecasting working group, is pleased to announce that: “In the 2008 reporting year, for the first time we were able to cover the Rhine-Neckar Metropolitan region, including Heidelberg, Mannheim and Ludwigshafen, in our survey. We have now succeeded in including two equally important real estate locations - Leipzig and Dresden - in the analysis”.
“Apparently, market players are aware of the added economic value of market transparency. We are endeavouring to include additional locations in the survey”, continues Beyerle.
In 2009, office take-up in Dresden was 84,000 sq m, while in Leipzig the total was 112,000 sq m. Mannheim registered a take-up of 43,000 sq m and Heidelberg 36,000 sq m in 2009.

The working group considers its role, as initiator and moderator in reporting the annual German office market figures, to be increasingly successful. Almost all market-leading real estate advisors now take part in the end-of-year consultations. "We are getting close to our aim of making available a consistent dataset, based on scientific methods, to potential German and international investors”, comments Beyerle, “particularly as there is increasing willingness to disclose letting data”. gif therefore intends to further expand the locations covered. The increasing numbers of enquiries from towns, cities and metropolitan regions wanting to participate in the survey confirm that gif has set a market standard for data quality.

39 companies, with around 100 representatives from the sector, took part in the 2009 survey, which was supervised by neutral gif moderators. Our thanks go to the moderators and to the following companies and organisations (in alphabetical order): Aengevelt Immobilien KG, Andre Schubert Immobilien, Angermann GmbH, Bankhaus Ellwanger & Geiger, Bayerische Immobilien Gewerbe GmbH, Beate Protze Immobilien, BIC Blum Immobilien Consulting GmbH, BNP Paribas Real Estate, Catella, CB Richard Ellis, CEV Center Entwicklungs- und Verwaltungs GmbH, Colliers PropertyPartners, CRE Resolution GmbH REAM, Cushman & Wakefield, Der Immo Tip, DIC Onsite GmbH, Dr. Lübke GmbH, DTZ Zadelhoff Tie Leung, Engel & Völkers, Grand City Property Management GmbH, Greif & Contzen Immobilienmakler GmbH, Imacon Immobilien Management und Consulting, Jones Lang LaSalle, Knight Frank, Lutz-Finanz, NAI Apollo, Oelschläger Immobilien, Pirelli RE Agency Deutschland, RheinReal, Rich Immobilien GmbH, Savills GmbH, Siemon Immobilien, Stadt Mannheim, Victor Immobilien.