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Positive mid-year figures for the Hamburg office market

Turnover of 223,000 m² of space by the end of June  |  Vacancy rate in reverse  |  Top lease price stable

Following a solid start to 2014, the market for office space in Hamburg continued to consolidate in the second quarter.

There had been a total turnover of 223,000 m² by the end of June, 111,000 m² of which took place in the second quarter. Consequently, the turnover in space in the first half of the year was up 12.1 % on the previous year's result. The result is 13.3 % above average in a five-year comparison, and another 5.5 % in a ten-year comparison.

The pre-letting of the 32,000 m² or so Telekom building in the City Nord area has made a significant contribution towards good results in the second half of the year. However, according to international commercial real estate consultancy Cushman & Wakefield (C&W), the turnover of small-sized space under 1,000 m² remains the mainstay, as was previously the case in the first quarter, with a 47.1 % share.

The traditionally strong City Centre proved to be the sub-market with the highest turnover in the first half of 2014 with 17.5 %, based on the number of lettings and by space. Thanks to the major Telekom transaction, the City Nord sub-market came just behind the City Centre with 16.3 % of turnover by space. HafenCity, which experienced a strong first quarter, contributed 10.9 % towards letting activity over the first six months.

A slight upward pressure on leases in the first half of 2014 led to modest lease price adjustments in the first half of 2014, including in the Hafen, Altona and City Nord areas. However, the top lease price achieved in the City Centre sub-market was recorded at € 24.00 per m²/month.

There was another slight drop in the vacancy rate in the second quarter, standing at 7.7 % at the end of June; there is around 1.1 million m² of space available to let in the short term. All in all, the market in Hamburg currently boasts around 14.3 million m² of office space, which is more or less in line with the previous year.

The construction completion volume for the past six months is below the level of previous years. Around 61,000 m² of office space has been completed, 39 % of it in the City Centre sub-market. Till Haubrich from the Hamburg Office Letting Department of Cushman & Wakefield explains: "The high volume of new construction in recent years has been chiefly propped up by the development of HafenCity. However, there have been delays there. The City Centre is currently the more active sub-market of the two within the Hamburg office market."

At the end of the first half of 2014, there was around 335,000 m² under construction. Some 90,000 m² will be finished before the end of the year, including the Burstah Offices with around 13,000 m².

Inga Schwarz, Manager of the Research Department of C&W in Germany, is optimistic about the next half-year: "The office market of the Free and Hanseatic City of Hamburg appeared in good shape throughout the first half of the year. Supply and demand are at a healthy level. We assume that the trends from the first half will continue in the second."