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Berlin office space market on a solid course of growth

Letting volume is at 303,000 m² at the end of June   |  Empty properties are stable  |  Top rents are stable

After an excellent start to the year with 152,000 m² of let office space in the first quarter, the Berlin office space market continues on its solid course of growth. A total of 303,000 m² of office space was newly rented in the capital in the first six months of the year. This makes the current letting volume around 9 % higher in direct comparison with the previous year - and a comparison with the last five years underlines the positive market trend: On average, around 15 % less space was newly rented in this same period. With an average of 232,000 m² of let office space in the first six months in the last ten years, this is a considerable 31 % less than in this year.

According to the analyses of the international real estate consultancy firm Cushman & Wakefield (C&W), to date there has hardly been any branch of industry other than companies within the firmly established IT industry in Berlin that has stood out from the other industries with a higher than average rental strength. Approximately 19 % of the Berlin surface area turnover went to the IT sector. Overall, the solid foundation of the Berlin office space market is down to the diverse mix of industries and the resulting rental activity.

The largest lets of the last three months include in particular the rental by the Reconstruction Loan Corporation (KfW) of 9,500 m² and the signing of a rental agreement for 6,400 m² by AVM GmbH. "Berlin will continue to be in high demand.", explains Gerald Dietzold, Head of the Berlin Office Space Leasing Department at C&W. "For the second half of the year, we are expecting further large-area lets."

Between January and June, 62,700 m² of new office space was completed and 305,500 m² of office space is currently under construction. Around a further 90,000 m² of office space should be created during this year, of which more than 90 % is already let.

With the simultaneous high levels of demand, the vacancy rate moved sidewards in the second quarter. Of the 17.7 million m² of office space stock, 6.4 % of the space is available in the short-term. In the medium-term, however, a reduction in empty properties is expected.

The top rents in the capital also remained stable: The top rent is currently 22.00 euros per m²/month. This price is achieved in the submarket areas of Potsdamer/Leipziger Platz, as well as in the central submarket area 'Mitte 1A'. In the B and C locations, a moderate increase in rents is also likely due to the good supply versus demand situation.