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Another strong showing for Hamburg's office space market in Q3 2014

Turnover volume of 382,000 m² in the first three quarters - Vacancy rate falls - Top lease price stable

After a good first six months in 2014, Hamburg's office space market can once again boast positive figures at the start of autumn. The turnover volume in the Free and Hanseatic City totalled around 152,000 m² over the last three months, making it the strongest third quarter since 2011. For the entire period from January to September, the office turnover volume amounted to 382,000 m² (including owner-occupiers), which represents a 24% increase on the previous year's result. According to international real estate services organisation Cushman & Wakefield (C&W), the value on the long-term observation horizon is around 17% above the five-year average of 326,600 m² and 12 % above the ten-year average of 340,100 m².

The largest contracts concluded in the third quarter were with Funke Mediengruppe and WPP. Funke, which includes the Hamburger Abendblatt newspaper, leased around 12,000 m² in the City submarket. The communication service provider WPP will move into a new build in Altona-Ottensen with around 13,000 m² space.  The new build project for the Verwaltungs-Berufsgenossenschaft (VBG) offering around 22,000 m² has also entered construction.  Till Haubrich from the Hamburger Office Leasing Team at C&W: “Currently, there is almost no new build space entering the Hamburg office market. The properties under construction are mostly funded by owner-occupiers or have been leased in advance. The upward pressure on office space leases continues to increase as a result.” Despite this, the top-level lease price has remained at 24.00 euro per m²/month. This was recorded in the City submarket.

Around 76,700 m² new office space was completed in the last nine months. Approximately 364,800 m² is still under construction, with around 28,000 m² expected to be complete during the last quarter of 2014. As of the end of September, the total stock of office space amounted to 14.4 million m². There is currently around 1.1 million m² available on a short-term basis. The vacancy rate has fallen slightly and stood at 7.5% at the end of the third quarter.

“The office market in Hamburg recorded a good quarterly result compared to the previous year, as well as in comparison to the top 5 cities,” said  Inga Schwarz, Head of Research at C&W Germany. “We expect the full-year result for 2014 to exceed the previous year's. If the figure for the fourth quarter is at the level of the previous quarter, we could see an office space turnover in excess of 500,000 m².” 

Research & Insight

Germany Office Snapshot

Office MarketBeat is a brief summary of the Office sector in key cities, providing comment on recent trends as well as market data and analysis of the impact on commercial real estate.
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