Hamburg: Office Letting Market, 1st Quarter of 2014
Stable Take-up of Space with Many Owner-Occupiers
Hamburg, 01 April 2014. In the 1st quarter of 2014 take-up of office space in Hamburg totalled 105,000m², close to the prior year’s level of 110,000m². Owner-occupiers were very prominent on the market, accounting for about 30%, or 30,000 m² of the total take-up of space. In contrast to this, no owner-occupiers completed transactions in the same quarter of the year before. “The market for office lets in Hamburg has started the year well. During the first quarter there have been some new developments in terms of the most popular sub-markets such as HafenCity and the biggest groups of tenants such as manufacturing and trade,” says Andreas Rehberg, managing director of Grossmann & Berger, commenting on the state of Hamburg’s office market.
Five Very Large Leases
The good letting result for the 1st quarter of 2014 is mainly due to five very large transactions in the 5,000m² and upwards segment; between them they total 46,000 m², whereby the two biggest transactions were building starts for owner-occupiers. Year on year take-up of space in this segment of the market rose by 70%. Oil and energy trader Marquard & Bahls AG began construction of its new company headquarters offering some 15,000 m² of office space on Shanghaiallee (HafenCity). This was the largest transaction of the year. Jungheinrich AG has also started building new corporate headquarters at Friedrich-Ebert-Damm 129 (Wandsbek) to provide around 10,000 m² of office space. The biggest let was signed by the Hamburg association of medical doctors Kassenärztliche Vereinigung for 7,900 m² in a property at Heidenkamspsweg 99-101 (City South). The second most popular size segment, accounting for 19,000 m² or 18% of the space taken up, was the office suite measuring 500 m² or less. Apart from the size segment 5,000 m² and upwards, take-up fell in all segments by between 6 and 50%.
HafenCity is Leading Sub-Market
A comparison of Hamburg’s sub-markets in the 1st quarter of 2014 ranks HafenCity top of the office market, accounting for a share of 19 % (20,400 m²) of total take-up and well ahead of City, which fell back to fifth place with share of a mere 8 % (8,700 m²). However, City registered 29 lets, more than any other section of the market, whereas in HafenCity there were only seven lets or building starts for owner-occupiers. The biggest transaction in HafenCity, apart from the construction start of the new headquarters for Marquard & Bahls AG, was the letting of 2,000m² to business law firm Bird & Bird at Großer Grasbrook 9. “From this we can see that it is not only the large, contiguous suites of offices at fair market prices that attract firms to HafenCity, but also the more extravagant architecture and the location as such,” explains Andreas Rehberg. Second-placed sub-market City South is a popular place for back-office activities; its share of take-up of space was about 18% (18,600 m²) divided among 18 new leases
or building starts for owner-occupiers. Apart from the let to the doctors’ association, other larger amounts of office space were let to the service provider Computacenter AG & Co. oHG which took about 1,800 m² at Sachsenfeld 3-5, and wind energy company DeWind Europe GmbH which leased about 1,600 m² at Heidenkampsweg 82.
Manufacturing Firms Take Most Space
In the 1st quarter the greatest volume of demand came from the manufacturing industry, which accounted for a share of 29 % (30,100 m²) of the take-up of space. With some 23% of take-up, trade and gastronomy occupied second place (24,000 m²). “This is attributable to the somewhat atypical distribution of volume, because the largest construction starts were for companies engaged in production and trade,” remarks Andreas Rehberg. Insurance companies trailed well behind, with a share of a good 9% (9,600m²) of the total volume. Traditionally, consultancies have accounted for the largest share of new tenancies, but this quarter their take-up was only 7 % of the total (7,600 m²). “We are expecting to see demand from the consultancy sector step up considerably during the year,” says Andreas Rehberg.
Rent Levels Unchanged
At the end of the 1st quarter of 2014 the premium rent in Hamburg (top price segment with a market share of 3% of lettings in the past twelve months) stood at 24.00 euros/m²/month. Compared with the end of 2013 both the premium rent and the weighted average rent of 14.00 €/m²/month have held steady. An examination of take-up of space in relation to rent categories shows that the dominant category, with 32% of the total, is 10.00 €/m²/month or less, followed by properties renting for between 10.00 and 12.50 €/m²/month which accounted for about 21% of take-up. 5% of total take-up of space related to properties costing over 20.00 €/m²/month. Year-on-year this represents an increase of some 30 %.
Lowest Vacancy Rate since 2008
At the end of the 1st quarter of 2014 some 910,000m² of office space was available for rent in Hamburg. Vacancies fell by 13% from the same-quarter figure of 1,041,000 m² in 2013. With the total stock of office space standing at 13.27m m², the vacancy rate including sublet space was 6.9 % (6.7 % without sublet space) or 1 percentage point lower than a year ago. “After 2002, with a vacancy rate of 6.1% and 2008 with 6.5%, Hamburg currently has the third-lowest level of vacant office space ever,” says Andreas Rehberg. The volume of new completions in Hamburg is likely to be 313,000 m² in 2014/2015. Around 47% of the space in projects that are planned or already under construction has been secured by advance contracts. Building activity is concentrated in the inner city of Hamburg, where 14 projects are set to deliver some 90,000 m², of which only 26% is pre-let. “We therefore hope to see the situation regarding the availability of units offering over 5,000 m² of contiguous new-build office space easing slightly during the year,” says Andreas Rehberg.
Good Prospects for 2014
“In view of good news from the job market and a positive economic outlook, we feel optimistic about the environment for the letting business this year. Some very interesting companies are currently actively searching for premises. However the rate of take-up during the first quarter does reflect some rather protracted decision-making processes. Provided that the large companies seeking space come to a decision this year, the turnover of space should be around 440,000 m² in 2014,” forecasts Andreas Rehberg.
The complete market survey will soon be available as download on our website.
About Grossmann & Berger
Grossmann & Berger GmbH is one of the leading real estate service companies for the sale and lease of commercial and residential real estate in Northern Germany. With ten offices in Hamburg and further ones in Berlin, on the island of Sylt and in Luneburg the company is present throughout the Northern German market. Thanks to more than 80 years of experience, the company disposes of an extensive real estate competence. Grossmann & Berger is a subsidiary of the HASPA-Group and founder member of the nationwide commercial real estate network German Property Partners. [
PressContact
Grossmann & Berger GmbH
Ms Britt Finke
Phone+49 (0)40 / 350 80 2 - 993
Fax+49 (0)40 / 350 80 2 - 36
1 / 3