Office Market Overview - Big 7 | 3rd quarter 2020 Published in October 2020 - JLL
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Office Market Overview Big 7 | 3rd quarter 2020 Published in October 2020
Uncertainty hampers business activities but the first
positive signals are noticeable in the third quarter
It takes a real crisis for offices, working environments and the on ‘flexible’ rather than equating it with the home office, es-
role of real estate to become socially acceptable topics of pecially in the sense of working zero days per week in the
conversation. Scarcely a day goes by without some discus- office. Working from home may be an aspect of flexibility,
sion or other about the home office, remote working or future but it also includes other workplaces such as co-working
working concepts. And the possible consequences for com- environments, converted hotel lobbies or the café around
panies, culture, infrastructure, cities, employee satisfaction the corner. Longer term, such a multi-location scenario
and mobility are not only being discussed in the personnel could also include space rented by companies on the out-
and finance departments of large corporates. Economists are skirts of cities. From this, two other essential aspects be-
also developing various scenarios to illustrate the effects this come very clear: 1. There will be no one-size-fits-all solution
change could have on the economy and employment mar- for all companies, and 2. remote working does not neces-
ket. Much of this is very speculative, and many things are still sarily correlate with lower demand for office space.
far from clear. New cases are rising again, and the resulting
short-term, ad hoc crisis management can again quickly dis- For now, most companies are focusing on manoeuvring
place such long-term trends and considerations. their businesses safely through the economic crisis. When it
comes to demand for commercially used property, it is cru-
Nonetheless, economic forecasters, personnel departments cial how the existing and required workforce presents itself.
and employment research specialists seem to agree on one If we believe the recent economic data and the ifo business
thing: flexible working is here to stay and will become an in- climate index, the economic slump could be somewhat
tegral part of corporate culture. The emphasis here must be milder than was feared at the beginning of the pandemic.
Completions and Vacancy Rate Big 7
1,200,000 sqm % 12
11
1,000,000 10 v
9
800,000 8
7
600,000 6
5
+357,000 sqm
400,000 4
3
Vacancy
200,000 2 compared to 2019
1
0 0
2015 2016 2017 2018 2019 Q3 2020
Completions in sqm Vacancy Rate in %
Office Market Overview | 3rd quarter 2020 2In the September survey carried out by the ifo institute, the rent recession. The effect on the nine-month figures is clear-
participating companies were again more positive about ly evident. Following the weakest first quarter of the last six
their current situation than in the previous month. In addi- years, the third quarter slightly outperformed the April-June
tion, they also expect to see a further recovery in their busi- period. However, the aggregate take-up volume for the Big 7
nesses. In short, the German economy seems to be stabilis- markets reached only 1.9 million sqm in the period from
ing despite the increasing number of infections. This is also January to end-September and is more than 37% below the
evident on the employment market. According to the Insti- previous year’s level. Even if you factor in last year’s very
tute for Employment Research (IAB), based on the large high take-up figure in a long-term comparison, the decline
number of companies affected by the lockdown, only a few, is still quite significant.
namely around 12%, indicated they had laid off employees.
What’s more, not all of these layoffs were necessarily a con- Take-up decreased in all seven property strongholds, rang-
sequence of Covid-19 but occurred for other reasons. Ac- ing from minus 24% in Munich to minus 61% in Stuttgart.
cordingly, the unemployment rate at 6.2% is higher than in In Berlin, take-up fell by more than 30% to 498,000 sqm,
the previous year, but the number of unemployed in Sep- which is unusual for the generally popular German capital.
tember was lower than in the previous month. For 2021, the The reasons for this acute weakness in demand are obvi-
IAB is forecasting an increase in employment by 130,000 ous: uncertainty about the future course of the pandemic
people and a decrease in unemployment by a further and the business environment. Spending is being slashed
100,000 people. in many companies, and for now planned relocations or
expansions are not on the agenda.
Demand in the Big 7 falls as expected
A decline in the willingness of companies to hire had al- Last but not least, how to achieve the right balance between
ready been indicated at the end of last year, regardless of the required office space and flexible working by employees
Covid-19. This economic setback is now having a delayed remains a tough question to answer. Here, it is incumbent on
effect on office markets, and is further worsened by the cur- every company to find a model that works for itself. An office
Prime Rental Index and Take-up Big 7
225 Index 1987=100 ‘000 sqm, rolling 12 months 4,400
4,200
215 4,000
3,800
+2.2 %
205 3,600
3,400
195 3,200
3,000
185 2,800
Prime Rent Q3 2020
2,600
175 2,400
compared to last year
Q1 16
Q2 16
Q3 16
Q1 17
Q2 17
Q3 17
Q1 18
Q2 18
Q3 18
Q1 19
Q2 19
Q3 19
Q1 20
Q2 20
Q3 20
Q4 15
Q4 16
Q4 17
Q4 18
Q4 19
Prime Rent (Index 1987=100) Take-up in ‘000 sqm
Office Market Overview | 3rd quarter 2020 3still conveys a corporate identity and provides a place to at around 3.2 million sqm compared with the previous year.
meet and exchange ideas, while the use of remote working The average vacancy rate therefore stood at 3.4%. By the
and the home office will increase where it is appropriate end of the year, we expect to see a further slight increase to
and possible. The search for adequate solutions will take what would then be 3.7%. With this level of vacancies, we
some time and must certainly cover a complex field. At any are still a long way from seeing a glut in supply. Nor do we
rate, more home working does not equal lower demand expect to see double-digit vacancy rates in the medium
for office space. term, as was the case in 2010.
So, what will happen next? The take-up volume could in- One issue that always arises in times of crisis is the sub-let-
crease in the fourth quarter and the annual result could still ting of space that is no longer needed. We are currently see-
exceed 2.5 million sqm. However, the market will still shrink ing more movement here, but the full extent of current dis-
significantly. In percentage terms, take-up could fall by more cussions is not yet possible to read from the figures. This is
than a third compared to the record year of 2019 or by a quar- understandable, because the decision to part with space is
ter compared to the boom years between 2010 – 2019. The not one that can be made overnight. Nevertheless, the near
decline in demand in 2020 would then be even more pro- 30% increase in space offered for subletting in the third quar-
nounced than during the financial crisis. And then? In addi- ter may be a first indication. Such space currently accounts
tion to the strong economic recovery that is currently forecast for around 10% of all vacancies. However, this is not yet hav-
by economists for 2021, we must also factor in the effect of ing a noticeably negative effect on rents.
leases that are due to expire. The expiry of five-year leases
alone will produce a re-letting potential of 2 million to 2.4 mil- Developers increasingly postpone new
lion sqm for 2021. In our view, this more than compensates construction plans
for possible ongoing uncertainties at corporate level as well In the first three quarters of 2020, office space completions
as for workplace concepts and models that could potentially amounted to a total of around 832,000 sqm. This was almost
reduce office space requirements. This leads to the expecta- 9% more than in the previous year. Of this volume, however,
tion of an increase in lettings take-up of 10-15%. only 156,000 sqm was still available at the end of the third
quarter. To give this a more positive spin, 81% of the volume
Vacancies continue to rise only slightly had already been let or assigned to owner-occupiers at the
Positive signals are still emanating from the supply side. Even time of completion. Over the next couple of years until 2022, a
if the decline in vacancies has finally halted and the turning further 5.1 million sqm is either under construction or in the
point has been reached, the increase is still rather moderate. planning phase. At the same time, project developers have al-
In the Big 7 combined, by the end of the third quarter the vol- ready reacted or will have to react to the market situation: nu-
ume of space available at short notice was almost 7% higher merous plans have been postponed for the time being. Here,
too, there is a degree of uncertainty about the future viability
of office space; a change in user requirements and user be-
haviour will consequently also trigger a reaction on the part of
developers. In this respect, a postponement is not a bad sign
per se. Such a measure could at least prevent a significant
volume of vacant space coming onto the markets. Further-
more, only 50% of the planned 5 million sqm is still available,
meaning that lease contracts have already been signed for
Office Market Overview | 3rd quarter 2020 4this new space. Should we see further confirmation of the eco- ly applies to older spaces. On the other hand, there is a ten-
nomic expectations towards the end of the year, and if it is fore- dency towards offering a flexibility surcharge on rents if
seeable that demand will also stabilise again, we assume that tenants want shorter contract periods (two to three years).
plans that have currently been put on hold or postponed will In view of the only moderate expansion in supply by the end
be reactivated relatively quickly. This will also depend on how of the year, we do not expect any other market situation in the
the financing banks assess this sector and its future viability. last quarter of 2020. Centrally located and well-equipped of-
fice space in particular will always be of interest to clients that
Prime rents prove to be stable want this kind of space and are prepared to pay top rents. A
Despite the significant decline in lettings in the property possible scenario where companies relocate from city centres
strongholds, rents are proving to be very stable and robust. to the outskirts of cities will not change that.
Not a single city has so far registered a drop in rents despite
the increase in vacancies. The JLL prime rent index re- Ultimately, despite all the controversial views about working
mained stable at 220.5 points by the end of the third quar- environments and locations, there remains a consensus: offices
ter, and was also 2.2% higher compared to the same period in the next few years will be of a higher quality and will adapt
of last year. With regard to the Big 7, Stuttgart and Hamburg more closely to the wishes of users and their employees for an
registered the strongest increases in a 12-month compari- improved quality of stay, health and well-being and flexible
son, with rises of 4.1% and 3.5% respectively. concepts. It follows that there will be scope for renewed rental
At the same time it should be noted that this stability relates price growth, regardless of the respective location.
to nominal rents. Effective rents, that is, once incentives
granted by owners have been deducted, are already declin-
ing. Landlords are more willing to offer generous incentives
in terms of rent-free periods or fit-out contributions. On av-
erage, the incentives would be around 5-10% of the nominal
rent for a 10-year lease. In future, however, tenants could ap-
ply more pressure in rental negotiations, although this most-
Office Space Take-up incl. Owner Occupier (sqm)
2019 Q1-Q3 2019 Q1-Q3 2020 %
Berlin 1 998,500 722,400 497,700 -31.1
Düsseldorf 2
549,900 418,700 231,800 -44.6
Frankfurt/M 3 579,500 387,600 211,300 -45.5
Hamburg 4
530,000 434,100 245,500 -43.4
Cologne 5 291,300 209,500 149,400 -28.7
Munich Region 6
760,000 615,600 470,300 -23.6
Stuttgart 7 319,000 256,700 99,200 -61.4
Total 4,028,200 3,044,600 1,905,200 -37.4
Office Market Overview | 3rd quarter 2020 5Vacancy incl. Space for subletting
Q4 2019 Q3 2019 Q3 2020 %
sqm Rate (%) sqm Rate (%) sqm Rate (%)
Berlin 1 376,500 1.8 396,000 1.9 503,500 2.4 27.1
Düsseldorf 2
526,700 5.8 549,300 6.0 591,900 6.4 7.8
Frankfurt/M 3 637,300 5.5 695,300 6.0 749,600 6.5 7.8
Hamburg 4
452,400 3.0 471,500 3.1 402,300 2.7 -14.7
Cologne 5 168,000 2.2 185,000 2.4 185,000 2.4 0.0
Munich Region 6
478,500 2.3 519,300 2.5 591,600 2.8 13.9
Stuttgart 7 206,700 2.3 189,100 2.1 179,500 2.0 -5.1
Prime Office Rents (€/sqm/month)
Q4 2019 Q3 2019 Q3 2020 %
Berlin 1
37.00 36.00 37.00 2.8
Düsseldorf 2
28.50 28.00 28.50 1.8
Frankfurt/M 3 41.50 40.50 41.50 2.5
Hamburg 4
29.00 29.00 30.00 3.4
Cologne 5 26.00 26.00 26.00 0.0
Munich Region 6 41.00 40.50 41.00 1.2
Stuttgart 7 24.50 24.50 25.50 4.1
Completions (in sqm)
2019 Q1-Q3 2019 Q1-Q3 2020 %
Berlin 1 237,300 156,700 291,700 86.2
Düsseldorf 2 115,400 60,000 47,900 -20.2
Frankfurt/M 3 130,300 62,900 117,400 86.6
Hamburg 4 117,100 98,100 53,200 -45.8
Cologne 5 95,600 60,300 55,400 -8.1
Munich Region 6 335,600 240,300 242,600 1.0
Stuttgart 7
92,700 87,200 23,500 -73.1
Office Space Stock (in Mill. sqm)
Q4 2019 Q3 2019 Q3 2020 %
Berlin 1
20.42 20.34 20.62 1.4
Düsseldorf 2
9.15 9.12 9.19 0.8
Frankfurt/M 3 11.65 11.61 11.61 0.0
Hamburg 4
15.02 15.01 15.03 0.1
Cologne 5 7.79 7.76 7.83 0.8
Munich Region 6
20.63 20.57 20.86 1.4
Stuttgart 7 8.81 8.80 8.83 0.3
1
City Area; 2 City Area incl. Ratingen, Neuss, Erkrath and Hilden; 3 City Area incl. Eschborn and Kaiserlei; 4 City Area; 5 City Area; 6 City Area incl. surrounding areas;
7
City Area incl. Leinfelden-Echterdingen
Office Market Overview | 3rd quarter 2020 6Berlin
Development of Main Indicators
1,200 ‘000 sqm % or €/sqm/month 40.00
35.00
1,000
30.00
Uncertainty is noticeable - the weakest quarter 800
25.00
since 2014
600 20.00
In the first nine months of 2020, around 498,000 sqm was
15.00
let in the Berlin office letting market, 25% below the five- 400
year average. The weak second quarter was followed by 10.00
200
the weakest quarter result since 2014, of around 139,000 5.00
sqm. Despite the effects of the pandemic, nine deals were 0 0.00
recorded in the > 10,000 sqm size category, just four less 2015 2016 2017 2018 2019 Q3 2020
than in the same period last year. With a total volume of Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)
around 123,000 sqm, the three largest lettings accounted
for 25% of the total take-up to date. The vacancy rate, 1.7 million sqm of office space currently under construc-
which remained stable until the mid-point of the year, tion in the Berlin market area.
rose by 50 bps to 2.4%. This increase is partly due to com-
panies increasingly examining their options for reducing The prime rent remained unchanged at €37.00/sqm/
space, for example by extending lease contracts or sublet- month, while the weighted average rent increased again
ting surplus space. The volume of vacancies is also rising to €27.56/sqm/month.
due to a higher number of speculative completions, with
Berlin: Office Space Market Areas with Rental Bands (€/sqm/month)
Berlin: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q3
Waidmannslust Märkisches
Heiligensee Französisch Gesundbrunnen
Viertel Rosenthal
Buchholz
Klarahoeh
Wedding A 10
Konradshöhe Blankenburg
Tiergarten Wittenau Wartenberg Prenzlauer
Wilhelmsruh Area Main Station-Europacity
Niederschönhausen A 114 Malchow(Hohensch Berg
€ 28.00-35.50
Konradsh Stadtrandsiedlung Malchow Falkenberg
Malchow Moabit
Charlottenburg Reinickendorf Heinersdorf Mitte
Hakenfelde Pankow Neu- € 21.00-34.00
Charlottenburg 1A Schöneberg Tegel Hochenschönhausen
Mitte
€ 23.00-37.00
Northern Suburb
A 111
€ 11.00-18.50 Weißensee Hansaviertel
Marzahn
Falkensee Flughafen
Wedding Alt- Mitte 1A
Falkenhagener
Wilmersdorf Berlin-Tegel
Feld Hohenschönhausen € 26.00-36.50
Gesundbrunnen
Haselhorst Prenzlauer Hellersdorf
Charlottenburg- Tiergarten Kreuzberg
Spandau Nord Berg
Siemensstadt Area Potsdamer-Leipziger Platz
Moabit Prenzlauer
Fennpfuhl
Berg-Friedrichshain Schöneberg € 25.00-37.00
Staaken
Charlottenburg-Tiergarten € 17.50-28.00 Lichtenberg
€ 17.00-29.00 Mitte
Western Suburb Hansaviertel
€ 11.50-19.00 Friedrichshain
Westend
Wilhelmstadt Biesdorf
Tiergarten Berlin Mediaspree Friedrichsfelde Mahlsdorf
Charlottenburg € 26.00-35.00 Rummelsburg
Eastern Suburb Kaulsdorf
Halensee
Kreuzberg € 10.00-27.50
Wilmersdorf-Schöneberg Alt-Treptow
Berlin
€ 16.00-30.00
Kreuzberg-Tempelhof
Wilmersdorf Karlshorst
Grunewald Schöneberg € 15.00-31.50
Gatow Plänterwald
A 117 Schmargendorf
Gatow Neukölln
Southern Suburb A 100
Friedenau
Area Airport Berlin-Brandenburg A 115 € 10.00-26.50
€ 8.50-18.50 Tempelhof Oberschöneweide
A 103
Niederschöneweide Friedrichshagen
A 113
Blankenfelde
Kladow Dahlem
Steglitz A 113
Britz Baumschulenweg
Nikolassee
Kladow Köpenick
Zehlendorf Adlershof
Mariendorf Johannisthal
Buckow Adlershof
Lichterfelde
A 10 Lankwitz € 10.00-18.50
Wannsee Rudow
A 13 Gropiusstadt Altglienicke Grünau
Marienfelde Buckow
Office Market Overview | 3rd quarter 2020 BerlinDüsseldorf
Development of Main Indicators
600 ‘000 sqm % or €/sqm/month 30.00
25.00
400 20.00
Public sector supports the Düsseldorf office market
In the Düsseldorf office letting market, around 232,000 sqm 15.00
of space was taken up in the first three quarters, 45% less
200 10.00
than in the same period last year. A comparison with the
five-year average also shows a significant decrease (33%). 5.00
Around 190,000 sqm was taken up in the Düsseldorf urban 0 0.00
2015 2016 2017 2018 2019 Q3 2020
area. At 52,000 sqm, the third quarter was the weakest of
the year, with the biggest deal concluded in the Airport sub- Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)
market, in which thyssenkrupp Elevator signed a contract
for more than 9,000 sqm for its new headquarters. The dorf urban area was 5.5% at the end of September.
strongest demand came from the public sector which was
responsible for one in every four square metres taken up. The prime rent has remained stable since the fourth quar-
Many companies from other sectors are currently still ter of 2019 at €28.50/sqm/month and is achieved in the
adopting a wait-and-see approach and postponing their CBD. Over the same period, the weighted average rent has
letting decisions. The vacancy rate rose by 0.2 percentage fallen by around 7% to €16.01/sqm/month. This is mainly
points to 6.4% in the third quarter. This is mainly due to the due to the absence of high-priced contracts for develop-
increase in space available for subletting, which currently ment projects during the period under review, several of
accounts for 11% of total vacancies. The rate for the Düssel- which were signed in 2019.
Düsseldorf: Office Space Market Areas with Rental Bands (€/sqm/month)
Düsseldorf: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q3
Krefeld Boesinghoven Wittlaer
Lank-Latum Pempelfort
Kalkum
Fischeln Langstkierst
Kaiserswerth Altstadt
Oberkassel
Ratingen Rohdenhaus
Ilverich
Ratingen CBD Düsseldorf
Airport € 8.00-16.00 Carlstadt Stadtmitte
Struemp € 17.00-28.50
€ 11.00-17.50 Lichtenbroich City
Lohausen Niederschwarzbach
€ 9.00-26.00
A 44
A3
Government District Wülfrath
Unterrath Hafen
€ 11.50-21.00
Rath Unterbilk
Stockum Knittkuhl
Friedrichstadt
North Metzkausen
€ 8.00-17.00 City-South Oberbilk
Seestern Derendorf
€ 10.00-13.00
Mörsenbroich Ludenberg
€ 9.50-14.50 Ludenberg Hubbelrath Bilk
A 57 Lörick Kennedydamm
Golzheim
Meerbusch
€ 14.50-24.00 Mettmann
Niederkassel
A 52 Linksrheinisch Düsseltal Grafenberg
Schöller-Dornap
Heerdt € 7.00-20.00 Pempelfort
Kaarst Oberkassel
Harbour Altstadt Flingern Nord Gerresheim
€ 14.50-25.00 Grafenberg-East Schöller-
Stadtmitte Dornap
Carlstadt Flingern Süd € 9.00-14.50
Hafen
Friedrichstadt
Unterbilk City-East
Lierenfeld Osterholz
Düsseldorf € 9.50-14.00 Gruiten Osterholz
Hamm Bilk Vennhausen Westring
Wuppertal
Oberbilk
Erkrath
Buettgen Neuss Unterfeldhaus
Eller Unterbach Erkrath/
Unterbach Hilden 29
Flehe
Volmerswerth A 46
Neuss Wersten South Haan
€ 7.00-10.00 € 8.00-12.50 A 59
Hassels
Grefrath Himmelgeist Reisholz
Holthausen
Himmelgeist Hilden Solingen
Itter
Kalstert
Holzheim Benrath
Office Market Overview | 3rd quarter 2020 DüsseldorfFrankfurt
Development of Main Indicators
800 ‘000 sqm % or €/sqm/month 45.00
40.00
600 35.00
Not all the consequences of the Coronavirus 30.00
crisis are visible yet 25.00
400
20.00
After an extremely weak second quarter, the around 100,000
15.00
sqm of take-up recorded in the Frankfurt office letting market 200 10.00
in the third quarter of 2020 was just 8% below the result for
5.00
the corresponding quarter in 2019.
0 0.00
2015 2016 2017 2018 2019 Q3 2020
The total take-up of 211,000 sqm is also the lowest volume of Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)
take-up recorded for the first nine months of a year since
1993. 2020 will probably return a year-end take-up result (of let to around 60,000 sqm. The vacancy rate reached its lowest
approximately 350,000 sqm) similar to those of 2004 and rate at the end of 2019 and is now expected to rise steadily
2009. A turnaround on the demand side is expected for the over the coming quarters. However, any rise in vacancy will
coming year. The overall weak demand has not yet had an be minimal given the high pre-letting rates attached to the
impact on vacancies and rents. Nominal rents have re- numerous imminent completions. Meanwhile, unaffected by
mained stable (the prime rent remains at €41.50/sqm/ the current crisis, a new “place to be” is being created with
month) and the vacancy rate has risen by just 20 bps. In the the development of a mix of uses in the Grosse Gallusstrasse
short-term and already in the third quarter, however, this / Neue Mainzer Strasse / Junghofstrasse area, which could re-
trend is evident from the increase in space available to sub- place the Alte Oper neighbourhood as the “heart of the CBD”.
Frankfurt: Office Space Market Areas with Rental Bands (€/sqm/month)
Frankfurt: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q3
Königstein Oberhoechstadt/Ts. Kalbach Harheim Westend- Nordend-
Oberursel Kalbach Bonames
Harheim
Nord West
Schneidhain Kronberg Mertonviertel-Riedberg
Ts. € 10.00-15.00 Bockenheim Westend Mittelbuchen
Frankfurter € 16.00-33.00
Steinbach Niederursel Berg Berkersheim Bad Vilbel City-West City
Nordend-Ost
€ 13.00-18.50 € 13.00-30.00
Wachenbuchen
Innenstadt
Altenhain Heddernheim Eschersheim B3 Bergen- Westend- Banking District
Preungesheim Enkheim Süd
Schwalbach Eschborn € 19.00-41.50 Altstadt
Other Urban Locations (North)
€ 9.00-17.50 A5 Eckenheim A 661;B 3 Maintal
Dornbusch Seckbach Central Station Area
Bad Praunheim Ginnheim Bischofsheim€ 12.00-24.00
Gallusviertel
B 521 L 3209
Soden Eschborn Seckbach A 66 Bahnhofsviertel
North
Hausen
Kelkheim € 11.50-16.50 Sachsenhausen-
Gutleutviertel Nord
Westhafen
Doernigheim
Bornheim
A 648 Rödelheim Westend- € 18.00-25.50 Hanau
Nord Riederwald Sachsenhausen-
Sossenheim
Rödelheim Nordend- Niederrad Süd
€ 9.00-13.50 West Nordend-
Ost East Fechenheim Mühlheim
Bockenheim Westend-Süd € 10.00-18.50
Innenstadt
L 3016
Unterliederbach Ostend
West Frankfurt am Main
Bahnhofsviertel Altstadt
€ 9.50-28.00 Kaiserlei
Gallusviertel
Nied Sachsenhausen-Nord € 8.00-16.00
Höchst Gutleutviertel
Zeilsheim
Zeilsheim Griesheim Oberrad Offenbach
Other Urban Locations (South) Oberrad am Main
Sachsenhausen Laemmerspiel
Hofheim
€ 11.50-17.00
Kriftel Niederrad
B 40 Sindlingen Schwanheim
Lyoner Quartier
Sachsenhausen-
€ 10.00-17.00 Süd
Hattersheim
Obertshausen
12a
Airport B 459 / B 46 A3
Kelsterbach € 16.00-25.00 B 43
Okriftel
Gravenbruch
Heusenstamm
Flughafen Neu-Isenburg
L 3117 Rembruecken
Eddersheim
Flughafen A 661
Rodgau
Frankfurt Zeppelinheim
Raunheim
Dreieich
Office Market Overview | 3rd quarter 2020 FrankfurtHamburg
Development of Main Indicators
800 ‘000 sqm % or €/sqm/month 35.00
30.00
No major deals were concluded 600 25.00
245,500 sqm of office space was let or reserved by owner- 20.00
400
occupiers in the Hamburg office letting market in the first 15.00
three quarters of 2020. This is 43% lower than the volume 10.00
200
secured during the same period last year and by far the 5.00
weakest result for the past ten years. However, contrary to 0 0.00
the pandemic-induced slump observed in the previous 2015 2016 2017 2018 2019 Q3 2020
quarter, a slight increase in the take-up of smaller premises Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)
was observed. Again, no major lettings were concluded dur-
ing this quarter, and just six leases for premises of 5,000 - Just under 131,000 sqm of office space will be completed
6,000 sqm were signed over the past nine months. Four of- in the final quarter of this year. At 84%, most of this has al-
fice submarkets (City Centre, Altona-Ottensen-Bahrenfeld, ready been let or reserved by owner-occupiers. A further
City South (Core Area) and the Harbour Fringe) were respon- 454,000 sqm is currently under construction, over 60% of
sible for over two-thirds of take-up. The vacancy rate is un- which is still available to let in the market; these projects
changed since the previous quarter at 2.7%. Although there are expected to be completed between 2021 and 2023.
are no signs yet of the anticipated (pandemic-induced) in-
creased volume of space released for subletting in Ham- The prime rent is unchanged at €30.00/sqm/month and
burg’s commercial property market, this could change over the weighted average rent has levelled off at €17.47/
the next six months. sqm/month.
Hamburg: Office Space Market Areas with Rental Bands (€/sqm/month)
Hamburg: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q3
Hummelsbüttel Sasel Volksdorf
A 23 Wellingsbüttel
Puetjen Schnelsen Flughafen
Fuhlsbüttel
Hamburg
Niendorf
Airport / Ohlsdorf
Groß Borstel Hamburg North-East
B4 € 9.00-12.50
€ 9.00-13.50
Halstenbek Bramfeld Farmsen-Berne
Eidelstedt Groß Borstel Alsterdorf Steilshoop
Rahlstedt
Schenefeld City Nord
€ 9.50-15.00
Barmbek /
Lurup Winterhude / Bramfeld
Lokstedt
Eppendorf / Uhlenhorst Winterhude € 10.00-15.50
Iserbrook
Harvestehude
Eppendorf/ € 10.00-14.50 Barmbek-Nord
Stellingen
Hamburg-West Rotherbaum
€ 9.00-12.50 € 12.50-22.00
Tonndorf
Hoheluft-Ost Dulsberg
Hamburg Wandsbek
Hoheluft-West
Barmbek-Süd Wandsbek
Harvestehude
Osdorf Bahrenfeld € 9.00-14.50
Jenfeld
Eimsbüttel
Eimsbüttel Uhlenhorst
€ 10.00-14.50 Barsbü ttel
Eilbek Marienthal
Rotherbaum
Altona-Nord A 24
Groß Flottbek
Altona-Ottensen-Bahrenfeld Hohenfelde
Sternschanze
€ 12.00-17.50
St. Pauli
East of Alster /
St. Georg
€ 12.00-22.50
Nienstedten St. Pauli St. Georg Borgfelde
City Centre Hamm
Othmarschen € 12.50-21.50
Ottensen Neustadt
€ 14.50-30.00
Hamburg-
City Süd (Outer Zone) Horn
A7 Altona- Altstadt € 9.00-12.50 Billbrook /
Altstadt Billwerder /
Harbour fringe City Süd (Core Area) A1
Hammerbrook Billstedt Billstedt
€ 13.50-22.50 € 9.50-16.00
HafenCity
€ 6.00-12.50
HafenCity
Finkenwerder Steinwerder
Waltershof
Harburg - south of the river Elbe € 16.00-26.00 Rothenburgsort
€ 9.00-14.50 Kleiner Billbrook Bergedorf
Grasbrook € 9.00-15.00
Veddel
Office Market Overview | 3rd quarter 2020 HamburgCologne
Development of Main Indicators
600 ‘000 sqm % or €/sqm/month 30.00
25.00
400 20.00
Coronavirus crisis and product shortages
characterise the market 15.00
In the first nine months, take-up in the Cologne office let-
200 10.00
ting market reached roughly 149,000 sqm, almost 30% less
space than in the corresponding period of the previous 5.00
year. It was also almost 40% lower than the five-year aver- 0 0.00
2015 2016 2017 2018 2019 Q3 2020
age. This was due not only to the cautious behaviour of
many businesses who are postponing their searches for Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)
space or are opting to remain in their existing premises giv-
en the uncertain economic situation, but also to the persis- year, commensurate with the average completion rate over
tent shortage of office space, particularly in the high-quality the past five years, but this will be wholly insufficient to im-
segment. Over the first nine months of the year, most de- prove the supply shortage. Even in 2021, it is anticipated
mand for space came from the public sector (17%) and that only around 66,000 sqm of new space will come onto
business services (16%). Companies from the insurance the market. The prime rent remained unchanged in the
sector followed in third place with 13%. The vacancy rate third quarter at €26.00/sqm/month, and a continued stable
rose by 0.2 percentage points to 2.4% in the third quarter development is expected over the coming months. Con-
but remains at a very low level overall. Around 55,000 sqm versely, the weighted average rent has fallen by 7% to
of new space was completed in the first nine months of the €14.74/sqm/month compared to the previous quarter.
Cologne: Office Space Market Areas with Rental Bands (€/sqm/month)
Cologne: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q3
Auweiler Lindweiler Schwarzbroich
Esch/Auweiler Heimersdorf
Pulheim Flittard Hardt
Pesch Dünnwald
Longerich Ossendorf/
Nippes
€ 6.50-14.00
A 57 Niehl Stammheim
Bocklemünd/Mengenich Weidenpesch Höhenhaus
Bergisch
Ossendorf
Gladbach
Mauenheim
Widdersdorf Bilderstöckchen
Dellbrück
Widdersdorf
Mülheim Other Locations
Brauweiler Nippes Holweide
Vogelsang Bickendorf Riehl € 6.00-11.50
Neuehrenfeld
Buchheim Bensberg
Lövenich
Ehrenfeld Neustadt-Nord
Deutz/ Buchforst
Müngersdorf
Köln Ehrenfeld/ City Centre Messe
Braunsfeld € 9.50-26.00 € 8.00-20.00 Höhenberg
Braunsfeld Merheim
Weiden € 6.50-15.50 Altstadt-Nord Kalk Brück
Deutz
Peripherie West
A 3;A 4 Neubrück
Buschbell € 7.00-12.50 Altstadt-Süd
Humboldt- Vingst
Lindenthal L 124
Rhinebank-West Gremberg
Kalk/
Junkersdorf Ostheim
Lindenthal/ € 13.00-26.00 Rath/Heumar
Marsdorf Mülheim
A4 Sülz Neustadt-
€ 7.00-16.00
€ 8.00-15.00 Süd Rath
Sülz Poll
Forsbach
Raderberg
Frechen Bayenthal
Klettenberg Zollstock
Bayenthal/ Gremberghoven
A 559
Porz/
Marienburg Westhoven Gremberghoven
€ 9.00-16.50 Marienburg € 8.50-14.00
Raderthal Ensen Eil
Gleuel A 59 Rösrath
Finkenberg
Hürth Rodenkirchen
Porz L 84
Berrenrath Rodenkirchen Weiß
Rondorf A 555 Urbach Grengel Rambruecken
Konraderhoehe € 7.00-15.00
A3
A1 Hahnwald
Zündorf
Sürth Elsdorf Flughafen
Meschenich Wahnheide
Meschenich Immendorf Godorf Wahn Köln/Bonn
Office Market Overview | 3rd quarter 2020 CologneMunich
Development of Main Indicators
1,200 ‘000 sqm % or €/sqm/month 45.00
40.00
1,000
Slowdown in rental price growth and a decline in 35.00
take-up as a result of the pandemic 800 30.00
25.00
470,300 sqm of office space was let or reserved by owner- 600
20.00
occupiers in the Munich office letting market in the first
400 15.00
three quarters of the year, 24% less than in the same
10.00
period the previous year. Take-up is expected to reach 200
5.00
610,000 sqm by the end of the year. In the first three quar- 0 0.00
2015 2016 2017 2018 2019 Q3 2020
ters, the five largest lettings with a combined volume of
around 139,000 sqm accounted for 30% of the total take- Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)
up result. The largest deal of the year so far (36,300 sqm)
was concluded in the second quarter. The current prime rent has increased by €0.50/sqm/
month (or 1.2%) to €41.00/sqm/month compared to the
The vacancy rate currently stands at 2.8%, 0.1 percentage same quarter last year and is expected to remain stable
point higher than in the second quarter and 0.3 percentage until the end of the year. The average rent for the market
points up on the corresponding quarter last year. It is expect- as a whole rose by around €1.87/sqm/month compared
ed to reach 3.0% at the end of 2020. In six of Munich’s 16 sub- to the same quarter the previous year. In the Munich ur-
markets, however, the vacancy rate remains below 2.0%. In ban area it is currently €22.95/sqm/month, and €12.75/
total, around 243,000 sqm of new office space was complet- sqm/month in the periphery.
ed over the past nine months, just 8% of which is still unlet.
Munich: Office Space Market Areas with Rental Bands (€/sqm/month)
Munich: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q3
Rothschwaige
Karlsfeld A 99
Ismaning
Oberschleißheim A9
Neu-Esting A8
Periphery-North
€ 10.00-16.00
Olching
North
€ 14.00-21.00
Gröbenzell
Olympiapark
Puchheim Kirchheim
€ 14.00-22.00 b. München
Eichenau North-Schwabing Poing
Grub
€ 16.50-26.00 Heimstetten
West München Arabellapark
€ 15.50-23.50 € 17.50-23.50
Periphery-East
City Centre Bogenhausen € 10.00-16.00
€ 22.50-41.00 € 20.00-30.00 Parsdorf
Riem A 94
Westend Moosfeld/
€ 16.50-25.00 Riem Ottendichl
Germering € 11.00-17.00
East
Gräfelfing A 96
€ 15.50-31.00
Periphery-West
€ 9.50-14.50 Martinsried Haar
Planegg Vaterstetten
South Neuperlach
€ 12.00-21.00 € 12.00-17.50
A 95
Stockdorf
Periphery-South A 995
Gauting Neubiberg
€ 9.50-14.50
Unterhaching Ottobrunn
Unterbrunn Grünwald
Office Market Overview | 3rd quarter 2020 MunichStuttgart
Development of Main Indicators
600 ‘000 sqm % or €/sqm/month 30.00
25.00
400 20.00
Catch-up activities apparent
At the end of the first three quarters of this year, office take- 15.00
up is sitting at just under 100,000 sqm, down 60% com-
200 10.00
pared to the previous year. When it comes to making firm
decisions, the market is adopting a wait-and-see approach. 5.00
Some are taking steps to reduce their expansion plans. In 0 0.00
2015 2016 2017 2018 2019 Q3 2020
addition, many companies are having to realign themselves
in terms of staff numbers due to the severe impact of the Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)
pandemic, particularly on Stuttgart and its automotive in-
dustry. But there is also some optimism: some businesses a persistent shortage of space. The market is a long way
will reduce their space requirements, while others will ex- from the healthy functional rate a business location needs
pand them or improve their quality significantly. As reduc- to enable it to give companies a wide range of options.
tions in size are often not simply achieved by handing back
space that is no longer needed but by moving premises In terms of rents, both the prime rent and rents in the sub-
completely, this will generate more activity over the medi- markets have remained unchanged in the third quarter. Only
um-term. Despite the restrained space take-up, the vacancy the weighted average rent has risen significantly, by 7% to
rate has fallen to a new historic low of 2.0%. Even if the pan- around €16.20/sqm/month.
demic curbs demand, Stuttgart will continue to suffer from
Stuttgart: Office Space Market Areas with Rental Bands (€/sqm/month)
Stuttgart: Office Space Market Areas with Rental Bands (€/sqm/month) JLL Research 2020/Q3
Neustadt
Rems-Murr-Kreis Korb
Hirschlanden Neuwirtshaus Zuffenhausen
€ 10.00-16.50
Korntal-Münchingen
Ditzingen Waiblingen
Kleinheppach
Beinstein
Hoefingen
Gebersheim Weilimdorf Feuerbach Bad Cannstatt Fellbach Remshalden
Rutesheim € 11.00-16.50 € 13.50-19.50 € 11.00-19.00 Weinstadt
Kernen im
Gerlingen Stuttgart-North Remstal
Leonberg € 15.00-20.00
A 81
Stetten im
Remstal Schnait
City Stuttgart Struempfelbach
Stuttgart-West € 15.50-25.50
€ 15.00-20.00
Stuttgart-East
€ 10.50-18.00
Warmbronn Stuttgart-South
€ 10.50-17.00
Unter-Obertürkheim/
Magstadt Degerloch Wangen-Hedelfingen
€ 10.50-16.50
€ 10.50-20.00
A 8;A 81 Esslingen
Hoffeld am Neckar
A 831
Vaihingen-Möhringen Ostfildern
€ 13.50-20.00
Kemnat Plochingen
Fasanenhof Plieningen
Sindelfingen € 11.50-18.00 € 9.00-11.00
A8
Dagersheim
Denkendorf
Leinfelden-Echterdingen Wernau
Böblingen Leinfelden-Echterdingen Neuhausen (Neckar)
€ 11.00-19.00 auf den Wendlingen
Bernhausen Fildern am Neckar
Office Market Overview | 3rd quarter 2020 StuttgartContacts
Contact Berlin
Stephan Leimbach Helge Scheunemann Gerald Dietzold
Head of Office Leasing Germany, Head of Research Germany Senior Team Leader Office Leasing
Member of the JLL Strategy Board +49 (0) 40 350011 225 +49 (0) 30 203980 144
Germany helge.scheunemann@eu.jll.com gerald.dietzold@eu.jll.com
+49 (0) 69 2003 1245
stephan.leimbach@eu.jll.com
Contact Düsseldorf Kontakt Frankfurt Contact Hamburg
Martin Becker Suat Kurt André Hoffmann
Senior Team Leader Office Leasing Senior Team Leader Office Leasing Senior Team Leader Office Leasing
+49 (0) 211 13006 600 +49 (0) 69 2003 1347 +49 (0) 40 350011 352
martin.becker@eu.jll.com suat.kurt@eu.jll.com andre.hoffmann@eu.jll.com
Contact Cologne Contact Munich Contact Stuttgart
Knut Kirchhoff Fritz Maier-Hartmann Sebastian Treier
Regional Manager Cologne Senior Team Leader Office Leasing Team Leader Office Leasing
+49 (0) 221 2775 17 +49 (0) 89 290088 139 +49 (0) 711 900370 36
knut.kirchhoff@eu.jll.com fritz.maier-hartmann@eu.jll.com sebastian.treier@eu.jll.com
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