PRESS RELEASE
Hamburg: Office Letting Market, 2nd Quarter of 2017
Take-up 25 percent up / Record result on Hamburg’s office-letting market
Hamburg, 04 July 2017. In the 1st half of 2017 25% more space was let or taken up by owner-occupiers
than in the same period of 2016. The brisk rate of take-up seen in the 1st quarter continued in the 2nd.
Figures from Grossmann & Berger, a member of German Property Partners (GPP), show that Hamburg
posted a new record result with office take-up of some 300,000 m². Accounting for around 8% or
25,000 m², owner-occupiers made only a minor contribution to the good overall result. “The new best
mark for a half year reflects market growth. In view of the fact that various larger companies are currently
seeking new locations in Hamburg as soon as possible, it would seem that a year-end total of 600,000 m²
is within reach,” comments Andreas Rehberg, managing director of Grossmann & Berger.
Large premises accounted for about 30 percent of turnover
Users who required 5,000 m² or more were responsible for about 30% of total take-up of space in the 1st
half year. In the 2nd quarter Olympus Deutschland signed the largest agreement thus far in the first half
year, taking 34,500 m² of office space. A tailor-made complex is currently being built for the company,
which describes itself as a leading manufacturer and vendor of opto-digital devices; located in City South
(Wendenstrasse 14-18) the offices will probably be ready in 2020. Because in order to build the new
company headquarters with a total floor area of 55,000 m² the buildings that were in use have to be
demolished, employees are obliged to move into the nearby “Poseidonhaus” (Amsinckstrasse 63-71d) for
the interim. The remaining five of the six agreements for office premises offering 5,000 m² or more were
completed in the 1st quarter. New tenants include the University of Hamburg which has taken 19,700 m²
in City North (Überseering 35); in August the humanities and arts institutes will move in for as long as it
takes to refurbish the “Philosophenturm” (Philosophers’ Tower) on the university campus.
The total of 330 rental agreements and owner-occupier contracts in the first two quarters was exactly
equal to the number of transactions in the prior year. The next-biggest segment of the market, with a
share of 21% of take-up, was the 1,001 to 2,000 m² size category. The third most popular size was 501 to
1,000 m², which accounted for 19% of take-up. Fourth place went to the segment between 2,001 and
5,000 m², accounting for 18%. The latter size category included the construction start of a new Parish
Centre on Max-Zelck-Strasse in Niendorf district (Hamburg West). The new administrative offices of the
church district of Hamburg-West/South Holstein will accommodate about 200 employees and have a total
floor area of some 7,300 m². It is estimated that about 4,000 m² of this will be used as office space.
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City South overtakes City as most popular sub-market
At the end of the first half year City South emerged as the dominant sub-market, ousting City from the top
slot. Take-up of space in City South added up to 84,900 m² or about 28% of the total. Apart from the
previously mentioned Olympus lease for 34,500 m² in the 2nd quarter, the good result was driven by a
number of agreements for large premises signed in the 1st quarter, such as the two contracts with the
Ministry of Schools and Vocational Training for some 8,400 m² (Amsinckstrasse 28) and for 6,400 m²
(Amsinckstrasse 34).
In City, office lets totalled 64,800 m² i.e. 20,000 m² less than in the office district of City South. Thus what
has traditionally been the most popular sub-market accounted for 22% to place second at the end of the
1st half year. The biggest agreement in the City in the first half year was signed in the 1st quarter by
WeWork, a global provider of coworking space, for some 7,800 m² in the “Hanseforum” (Axel-SpringerPlatz 3). In the 2nd quarter another business centre operator, Regus, signed the second-largest
agreement, taking 3,400 m² of space in the “Work Life Center” (Gorch-Fock-Wall 1a).
The third-biggest sub-market in the first half of the year was City North, with a share of 11%. Around
32,100m² of office space was let during this period. The good result for this sub-market stemmed, in
addition to the 1st-quarter contracts with the University of Hamburg (Überseering 35), with ERGO life
insurance and the fitness studio beneFit (both in the “Silberling”, Überseering 32-34), from two
agreements in the 2nd quarter for space in the “Ü8” (Überseering 8) - signed by Regus Business Center
and akquinet AG (extension of premises).
Olympus puts manufacturing sector ahead
Thanks to the large amount of space let to Olympus, almost a fifth of total take-up (57,600 m² or 19%)
was attributable to companies in the manufacturing sector. Consultancy firms, traditionally avid seekers of
new space, ranked in second place, with 16% (48,000 m²). The biggest agreement signed by a
consultancy was for about 5,700 m² in the “Bieber-Haus”, Heidi-Kabel-Platz 2 (St. Georg), which was let
to Publicis Pixelpark. Public administration, federations and social facilities came third, with about 11%
(33,000 m²). This year on year increase in take-up was the result of, e.g., the previously mentioned
owner-occupier project by the church district Hamburg-West/South Holstein and new lets such as the
contracts with the Ministry of Schools and Vocational Training (described earlier) for space in City South,
with the Federal Employment Agency (2,800 m² in “Channel Hamburg”, Harburg) and the Central
Customs Office (1,800 m², Heidenkampsweg 96-98, City South). Construction and property management
firms followed in fourth place, taking about 16% (48,000 m²) of the total. The biggest lets to members of
this sector of industry were to the business centre operators WeWork (7,800 m²) and Regus (3,400 m²).
“The great demand for business centres offering a wide range of services shows that there is
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an increasing need in Hamburg for flexible office space and that the ways in which work and business are
organized are becoming more diverse”, says Rehberg, commenting on the trend.
Premium rent rises by more than 8 percent
By the end of the 1st half of 2017 the premium rent (prices paid in the most expensive 3% of newly let
space in the past twelve months) had risen year on year by 8.2% from €24.50 to its current level of
€26.50/m²/month. At the same time the average rent, weighted by space occupied, fell slightly from €14.90
to €14.80/m²/month, whereas the rate in the prior quarter was €15.00/m²/month. “The dramatic reduction
of empty space has changed the market. The scarcity of offices will, in the shorter term, mean higher
rents. Moreover, the landlords will be adjusting their incentive packages, which used to be very generous,
to reflect the new situation on the market,” says Rehberg, commenting the changes in rates.
Vacancy rate falls below 5 percent for first time in 10 years
For the first time in 10 years the vacancy rate in Hamburg fell below the 5% mark. By the end of the 1st
half year the vacancy rate in Hamburg, including sub-let space, had fallen to 4.9% from 5.4% in the same
period a year before. Only 666,700 m² of space was available at short notice. “Even if a majority of users
are unwilling to face the reality, we have to regard a vacancy rate of less than 5% as denoting a shortage
of space. There are practically no small office suites of less than 250 m² left on the market. And even for
larger suites, the situation is becoming critical. In some cases, we now see three or more potential
tenants negotiating on one and the same property,” says Rehberg, describing how acute the position
now is.
The volume of completions in Hamburg is set to reach a high of 277,000 m² in 2017. However, less than
40% of this total will go on the market as speculative space. Scheduled office completions in 2018 total
around 141,000 m². Of this amount around 52% is still available. Building this year and next is
concentrated in the City sub-market. “117,200 m² of office space is in the pipeline here. Projects include
major developments such as the “Stadthöfe” (Neuer Wall/Stadthausbrücke) and “Alter Wall” (Alter Wall 232) where the vast majority of space is already off the market,” says Rehberg.
Outlook 2017
“In view of great demand from potential tenants in conjunction with a shortage of empty space and the
small proportion of speculative space in new developments, tensions on the office market are slowly
becoming apparent. Project developers should take this market opportunity to build more on speculation.
Many tenants, including those who need large premises, are already signing to secure space that they
cannot move into until two or three years hence. As far as take-up of space is concerned, we expect brisk
business in the second half year, possibly exceeding the amount posted a year ago,” forecasts Rehberg.
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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, Ahrensburg, Lüneburg and on the island of
Sylt 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 (GPP). [www.grossmann-berger.de]
Press contact
Grossmann & Berger GmbH
Ms Tatjana Merger
Phone +49 (0)40 / 350 80 2 - 231
Fax
+49 (0)40 / 350 80 2 - 200
Mail
[email protected]
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