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Full speed ahead – continued momentum for Hamburg's's office market in Q2 2015

Take-up of around 259,000 m² in first half of 2015 – Vacancy rate stable – Prime rent at EUR 24.50 per m²/month

With take-up of 259,000 m², the office space market in Hamburg has experienced a strong first half in 2015. Of this, around 129,000 m² was in the second quarter.

According to international commercial real estate consultancy Cushman & Wakefield (C&W), this represents the best half-year results for the office letting market since 2008. Although Hamburg ranks below Berlin and Munich in terms of absolute take-up in a comparison of the top 5 cities in Germany, it has performed around 13 % better than during the first half of 2014 (230,000 m²). The result for Hamburg is also significantly above the five and ten-year averages, by 27% and 19% respectively.

With a share of around 45%, letting activity in the segment below 1,000 m² displayed its customary strength. In the segment of over 10,000 m², two deals were closed to mid-year, for a total area of some 52,000 m². The medium-sized segment of between 1,000 m² and 3,000 m² has thus far experienced stronger demand in 2015 than 2014, accounting for 27% of take-up, compared to 15% for this segment in the same period last year.

After concluding the largest transaction in the first quarter, with the acquisition of the Axel-Springer-Haus for its own use, the City of Hamburg was also responsible for the largest transaction in the second quarter. The city authorities also signed an advance lease for around 19,500 m² in the core City-Süd submarket for its tax offices. With around 21%, the city authorities are therefore the largest contributor to take-up in the first half of 2015.

These large-scale lettings are also reflected in the market shares by submarket. Around 32% of take-up was in the City submarket (first half of 2014: 17%) and around 14% in the core City-Süd area (first half of 2014: 11%), which therefore takes second place. The remaining take-up was distributed evenly across the other office market locations.

Around 53,000 m² of space was completed during the first six months of 2015, around 12% less than in the same period last year. Over half of the projects currently completed have been let in advance. Around 370,000 m² is currently under construction. An additional completion volume of 90,000 m² is expected for the remainder of 2015.

As at 30 June 2015, the total stock of space available in Hamburg's office market is around 14.5 million m², with around 1.1 million m² available for immediate entry. The vacancy rate of 7.3% is the same as in the previous quarter.

Rents for office space in Hamburg are seeing slight upward pressure. As a result, an increase in prime rents was observed in the Altona, Eppendorf and City submarkets. The prime rental price in Hamburg, is achieved in the City submarket; at EUR 24.50 per m²/month.

Jörg Rosenfeld, head of the Hamburg Office Letting department at C&W gave a positive assessment of the current letting market: “The market in Hamburg flies the flag for the north of Germany and is in rude health. There are currently a number of large-scale requests in the pipeline. We therefore expect a year-end result that exceeds last year's level.

Research & Insight

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