Market Report: Developments on the German Office Property Market in the Top 7

  • 3 years ago

In the new edition of its biannual market report, the financial services company WealthCap (Wealth Management Capital Holding GmbH) provides an overview of developments in the German office property market in the first half of 2020, with the so-called top 7 office markets (Berlin, Düsseldorf, Frankfurt am Main, Hamburg, Cologne, Munich and Stuttgart) being the focus of the analyses. Thus, the first six months of the year show a decline in the overall economy caused by the effects of the Corona pandemic as well as a decline in the transaction volume.

The market overview examines office real estate investments in the top 7 in Germany in four thematic areas. These include the areas of market environment, behavioral variables, and the office investment and leasing market. In the analysis of the market environment, the first and second quarters of 2020 show a decline in economic activity compared with the previous year, which can be attributed to the reduction in gross domestic product. The "Behavioral variables" theme represents the behavior from both the financier (bank) and investor (investor) sides. While financiers are reporting a slight increase in new lending, they are at the same time forecasting a decline in the volume of new business for 2020 as a whole. On the investor side, demand remains at a high level despite the declining transaction volume.

Detailed information on the downward trend in transaction volumes and prime yields in the largest seven office property markets in Germany can be viewed under the "Office investment market" topic area. The "Office Leasing Market" section examines both the vacancy rate and planned new construction in the office property sector. The development of rental prices and prime rents can also be read in the analysis of the office rental market. The WealthCap market report is a collaboration with real estate service provider JLL and is being published for the sixth time this year.

Source: WealthCap
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