Office markets stable despite the economic weakness - analysis of BNP Paribas Real Estate

Office markets stable despite the economic weakness - analysis of BNP Paribas Real Estate

positive development on the German real estate market

In the first half of 2024, the German office markets show a stable development overall, despite the still weak economic situation. In the first six months of the year, area sales amount to around 1.26 million square meters and thus corresponds to the previous year's level. The markets in Berlin, Düsseldorf, Essen, Frankfurt, Hamburg, Cologne, Leipzig and Munich continue to move below their average level. However, the comparison to the previous year is very different in the office centers, since large degrees still make up the difference. This results in an analysis of BNP Paribas Real Estate.

The German office markets show overall robustness, despite the difficult economic framework. The sales turnover was able to confirm the previous year's result of almost 1.3 million square meters and sometimes even recorded area sales above the level of 2023. This shows the resilience of the German office centers. Although the markets are still significantly below their long -term average of 1.6 million square meters and miss it by about a fifth, they were able to counteract further downstairs. The number of major contracts over 10,000 square meters has more than doubled compared to the same period last year. This is a positive signal for the market.

Munich is the highest sales office market and recorded the area sales of 293,000 square meters in the first half of the year. Although the result is a good 15 percent below the long -term cut, the previous year's result is exceeded by impressive 24 percent. In Berlin and Frankfurt, too, market events were positive compared to the previous year. In the federal capital, area sales for half -year are 281,000 square meters and thus exceeds the previous year's result by 7 percent. In Frankfurt, area sales are moving with 215,000 square meters above the previous year. An increase could also be recorded in Düsseldorf and Hamburg. Leipzig continues to show stability, while Cologne and Essen have disappointing results.

The vacancy on the German office market continued to increase in the second quarter. At half -year, the vacancy is 7.1 million square meters, which corresponds to an increase of around 26 percent compared to the previous year. Despite the increase, the vacancy in all office markets except Düsseldorf continues to move under the highest levels of past cycles. The construction activity is declining due to increased construction and financing costs as well as the subdued demand. The still available areas in construction currently amount to 1.54 million square meters and correspond to the level of 2019.

The top rents on the German real estate market have shown themselves stable in the second quarter and are at a very high level. Munich records the highest top rent at 52.00 euros per square meter. In Düsseldorf, the top rent also rose to 42.00 euros per square meter. The average rents present themselves comparatively stable and are at an above -average level in all analyzed markets.

The framework conditions for the German office markets are still challenging. The hoped -for economic upswing has delayed and the German economy does not send any clear signals of sustainable acceleration. Nevertheless, the signs indicate an increasing overall economic activity. The office area, which correlates closely with GDP growth, is expected to attract again. The German office markets are expected to have moderate growth compared to the previous year.