The international real estate advisor forecasts that by year-end take-up in these markets of Berlin, Munich, Frankfurt, Hamburg, Cologne and Düsseldorf will reach more than 2.9 million sq m, exceeding the 10-year average of 2.76 million sq m.  The firm attributes this rise to an expected increase in the number of large office lettings due to complete in the final quarter of 2012, pushing up take-up levels.

In terms of location, Berlin and Frankfurt recorded a year-on-year increase in take-up in Q3, by 6.9% and 6.1% respectively.  The remaining four cities recorded a decreased level of take-up ranging between -8.8% and -29.2%.

Robert Kellershohn, managing director of office agency at Savills Germany, says: “Overall the office sector is strong in Germany’s key markets.  The volume of new office completions is at its lowest level for the last five years with 670,000 sq m coming on to the market in 2012, the majority of which has been pre-let.  This has resulted in a fall in vacancy rates across the board and stable prime rents.”

According to Savills data the average vacancy rate in Germany’s key markets stood at 9.0% at the end of Q3 12, representing a decrease of 9.2% year-on-year.  Berlin and Munich recorded the lowest vacancy rates of 5.4% and 6.9%, respectively. Frankfurt, which registered the highest vacancy rate at 14.3%, recorded the most significant year-on-year decrease, at -19.9%.

In terms of rents, the average prime office rent across the six key German office markets stood at €26.38 per sq m per month at the end of Q3 12, in line with Q3 11 according to Savills data.  Broken down by location, all markets recorded a slight increase or remained stable in terms of prime rents with the exception of Frankfurt, which recorded a 5.3% decline to €36 per sq m per month.

Matthias Pink, head of research at Savills Germany, comments: “We expect this stability of prime rents to continue through to year end.  Average rents are slightly weaker with most markets recording a slight decrease, with the exception of Munich where average rents rose by 6%.”

German office markets in Q3 2012