The market report by German Property Partners (GPP) on "Commercial Real Estate Market - German Top 7 Locations" examines developments in the office property sector. The seven cities analyzed include Hamburg, Munich, Berlin, Cologne, as well as Frankfurt am Main, Düsseldorf and Stuttgart. The data collection and analysis relates to the first and second quarters of 2020. Overall, according to the study, a decline is emerging in the office property market due to the effects of the Corona pandemic.
Although the transaction volume on the investment market of EUR 12.5 billion in the first quarter of 2020 was only two percent lower than in the previous year, office take-up in particular slumped significantly. Between January and June 2020, around 35 percent less office space was occupied in the cities surveyed than in the previous year. Specifically, this involved 1.2 million square meters of space that remained unoccupied. Between January and March, the market for office leasing in the top 7 cities dropped 25 percent, and between April and June, it fell 44 percent. One of the reasons for the decline is that many companies initially halted or postponed new leases.
Frankfurt am Main was hardest hit, with a slump of 55 percent (125,800 square meters) in demand for office space and occupancy. Berlin, due to the leasing of the "Cule" office complex by Deutsche Rentenversicherung, had the smallest decline compared with the other cities surveyed in the 2020 quarter. Nevertheless, this city also recorded a drop of 19 percent and 310,000 square meters of space compared to the previous year. Analyses and further information on vacancy rates, rental prices and an outlook can be found in GPP's market report.
Source: GPP
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