Office letting market in Frankfurt 1st quarter 2010 in comparison to last nine years: Worst result after 2004

Compared to the time period in the previous year with approx. 135,500 sqm, there was a decrease of approx. 60 per cent, although this high result in 2009 was due to the letting to the Deutsche Bahn in the SilberTower with approx. 72,000 sqm. A glance at the average value is more expressive: Since 2002 there was a letting of approx. 78,660 sqm office space on average in the 1st quarter. Therewith, with 54,906 sqm the 1st quarter 2010 lies approx. 30 per cent below average. The division of transactions over 1,000 sqm (a total of approx. 29,000 sqm divided onto 18 transactions) and under 1,000 sqm (approx. 26,000 sqm) is almost balanced. Despite the poor first quarter Martin Angersbach, Head of Office Letting NAI apollo Frankfurt, expects that the annual result of 2010 will lie just below 400,000 sqm and therefore be higher than in 2009 with 350,000 sqm.
A vacancy of approx. 1,857,000 sqm could be registered in the 1st quarter 2010 for the municipal area Frankfurt including Eschborn and Offenbach-Kaiserlei (Frankfurt gif-area). Therefore, with a total asset of approx. 11,825,000 sqm there is a vacancy rate of approx. “With this it needs to be considered, that approx. 15 to 20 per cent of the vacancy is regarded as unrentable space", says Martin Angersbach. „These either need to be demolished or substantially refurbished, respectively brought to an alternative use such as residential or hotel."
The average rental price is approx. 17.50 EUR/sqm. The requested prime rent for properties that are obtainable within three months, lies at 39.00 EUR/sqm for a property in the city centre. The other prime properties range from 34.00 to 37.00 EUR/sqm. With this the prime rent indeed lies above the previous year's level, however this is relativised by the owners through the granting of incentives. „Due to more incentives the effective rents will continue to decrease in 2010“, says Martin Angersbach. The continuing insecurity regarding the economic development in Germany will also co-determine the letting performance in the Rhine-Main-area in 2010.