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Berlin's office market records highest lease results in Germany

New lease volumes of 651,000 m² | Vacancy rate falls | Top lease price remains at EUR 22 per m²/month

The leasing figures for the office space market in Berlin show a positive result. Whereas the first three quarters saw a solid result with an average of 151,000 m² turnover, the market picked up again in the last quarter with 197,000 m² of new leases recorded between the start of October and the end of the year. This contribution to the overall figures catapulted Berlin to the top of the rankings for the German office space market. A total lease volume of 651,000 m² was recorded for the German capital in 2014. Compared to the previous year's result, the market performance increased by 16%. The average for the previous ten years is 521,100 m².

Gerald Dietzold, Head of the Berlin Office Leasing Department at Cushman & Wakefield in Munich, explained the results as follows: “The mood among the market participants was positive throughout the entire year. Four large-scale lease agreements were concluded in the fourth quarter.” Around 58,000 m² (29%) of the overall turnover was achieved in the months from October to December through lease agreements in excess of 10,000 m². These include Deutsche Bank, with an advance lease for 24,700 m² in Ernst-Reuter-Platz. Only in the first quarter were further large-scale leases recorded for the market in Berlin (around 36,900 m²). “The bulk of the leases for the entire year fell within the traditional small to medium size categories below 5,000 m². That speaks in favour of the solid lease market in Berlin,” said Dietzold.

IT sector records above-average property turnover


Further analyses by C&W showed that the IT sector, which is firmly established in Berlin, accounted for around 42% of the property turnover and therefore produced above-average leasing results. All other sectors contributed to market stability through very balanced shares in the office space.

Vacancy rate fell slightly


The vacancy fell again for the first time after nine months. There is currently 1.09 million m² space available on the market at short notice. With the total office space available amounting to 17.7 million m², this corresponds to a vacancy rate of 6.1 %. If lease performance remains stable over the coming months, the vacancy rate is expected to fall slightly as the majority of the space currently under construction has been leased in advance. Over the course of 2014, 151,600 m² new office space was completed, of which 63,300 m² was competed in the final quarter. A further 294,000 m² is currently under construction.

Top lease price remains stable at EUR 22 per m²/month


The top-level lease price remained stable in the German capital and stood at EUR 22 per m²/month at the end of December. Due to the good lease situation in Berlin's premium locations in particular, the top lease price remains subject to upward pressure, which will likely result in a moderate increase during the course of 2015. The top lease price currently applies in the submarkets of Potsdamer/Leipziger Platz and Mitte 1A.

If the general economic conditions remain good in 2015, a continued stable development is expected for the office market in Berlin.