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Upbeat start to the new year for Hamburg's office market

Take-up of around 130,000 m² in first quarter of 2015  |  Vacancy rate continues to fall  |  Top lease price remains stable


Hamburg's office space market started 2015 with an above-average result of around 130,000 m² (including owner-occupiers). Compared to the previous year, the take-up of office space within the Hamburg region increased by around 16%. In 2014, around 112,000 m² was recorded for the first quarter. From a long-term perspective, the result is 33% above the five-year average and 31% above the ten-year average.

According to Cushman & Wakefield (C&W), international real estate advisor, the result for the first quarter of 2015 continues the trend from the previous year. Small-scale transactions served as a supporting pillar, with large-scale deals by owner-occupiers driving the results upward. During the first quarter of 2015, owner-occupier transactions and projects accounted for a share of around 40%. This includes around 32,000 m² in the Axel-Springer-Haus building, which was acquired by the city and will be used by the municipal authorities. This also represents the largest transaction during the first three months of 2015.

Deals in the size segment below 1,000 m² amounted to around 44,000 m². Of this, around 34% of deals were attributable to the small-scale segment. With a share of around 25%, the segment for spaces between 1,000 m² to 3,000 m² also put in a very strong showing.

At around 52,000 m² - which included the Axel-Springer transaction - the City submarket accounted for the largest share of turnover by far. This corresponds to a share of around 40% and represents an extraordinary result. The submarkets of HafenCity and the core City-South area took second and third place with shares of 11% and 6% respectively.

The total stock of office space in the Hamburg market stands at 14.4 million m², with around 1.1 million m² available on a short-term basis. The vacancy rate fell slightly over the course of the first quarter, and stood at 7.3% as at the end of March. This figure was boosted by the low completion figures, particularly in speculative office space construction, coupled with above-average take-up rates. Between January and March, around 17,000 m² office space was completed, which was roughly equivalent to the previous year's figure. There are, however, signs that the available office space will increase over the medium to long term as the level of speculative new construction increases in this area. Over the past few months, for instance, construction commenced on around 80,000 m² office space - with an advance lease rate of less than 50%. As of the end of March, around 380,000 m² is under construction.

As in the previous quarter, the submarkets remain under slight pressure, but continue to hold at the same level. This also applies to the top lease price, which was achieved in the City submarket and remains stable at EUR 24.00/m²/month.

Jörg Rosenfeld, head of the Hamburg Office Leasing Team at C&W, was highly satisfied with the development of Hamburg's office space market in the first quarter of 2015: ”The results once again demonstrate that the office market in Hamburg is underpinned by a healthy mercantile community from areas including the service sector. These well-managed companies provide Hamburg with a stable office market with good prospects over the long term. As a result of this stability, Hamburg is also a safe harbor for real estate investments.”