Chart of the Month December: Office market better than expected
In the coming years, high volumes of newly completed offices will again come onto the market. Vacancy rates are rising, but not to a critical extent. Landlords and tenants can once again negotiate at eye level.
Despite several crises, the office market has proven to be surprisingly robust. Only the investment market has become quieter - the price expectations of sellers and buyers often do not come together, the finding phase continues.
A look at the demand side shows that the number of office employees in the A and B cities has not declined, on the contrary. In the A-cities it will continue to rise over the next four years, only in the B-cities will growth flatten out. However, in the still smaller cities, demographic change will partly cause a decline in the medium term. On the supply side, completions will continue to rise until 2024, but new construction will decline in the medium term. Vacancy rates will continue to rise in the coming years, albeit from a very low level in the A and B cities. We are thus returning to an area of a fluctuation reserve - tenants and landlords can once again negotiate at eye level.
Offices will continue to be needed, albeit with slightly different concepts. It is no longer possible to imagine life without the topic of ESG, which is already determining the investment market (and successively also the rental market) and thus also has a considerable impact on new construction.
Contact: Alexander Fieback, Team Leader Office and Logistics Real Estate at bulwiengesa and Branch Manager Berlin, email@example.com
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