The German office market has stabilised with 564,000 sq m (6,071,144 sq ft) lettings in Q110, representing a similar volume to 2009 according to Savills.

The international real estate advisor reports that of the five major German office markets* Dusseldorf saw the highest performance in Q110 with a 190% increase in take-up from last year, following a 90,000 sq m (968,783 sq ft) letting to Vodafone. In contrast, Frankfurt take-up decreased by over two thirds, this Savills suggests was due to a significant letting in Frankfurt in March 2009 of the former Dresdner Bank tower to Deutsche Bahn, which sets the Q109 comparative figure at a high level.

Robert Kellershohn, director of offices for Savills Germany, says: “The stabilising economic situation is now being reflected in the office letting markets whereas a marked pick-up in letting activity is still not apparent.”

In terms of rental levels, Savills indicates an emergence of two trends. Overall prime rents have dropped markedly over the past twelve months however average rents have increased notably in locations such as Frankfurt and Hamburg. Meanwhile vacancy levels average 9.8% across the board, this compares to average levels of 9.1% in 2009. Savills suggests due to the delivery of new office schemes in 2010, with an anticipated peak of 1.2 million sq m new space, vacancy rates are likely to rise further over the course of the year.

Kellershohn continues:” Prime rents in German core locations will remain stable whereas rising vacancy rates will put a further pressure on peripheral locations. The average rents will only be slightly affected as take-ups especially in core-objects will not decrease.”

*Germany’s five major office markets include Berlin, Dusseldorf, Frankfurt, Hamburg and on Munich