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In the major German office markets, office space is becoming a rare commodity. Availability across the top six office markets at the end of the first half year totalled 4.6 million sq m, which is around 5% less than in the previous quarter. The vacancy rate declined by 30 basis points over the last three months to 6.2%. We expect the vacancy rate to fall below the 6% mark by the end of the year.
This is partly explained by the sustained high demand for office space owing to the healthy economic climate and associated company formations and expansions. Take-up rose by a further 11% year on year to around 1.6 million sq m.
Another reason is that new-build activity remains relatively modest. Only 0.9 million sq m of new office space will come to the market in 2016, which is insufficient, particularly since three quarters of this new-build space is already pre-let.
Source : Savills
