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Frankfurt office market with solid rental performance at the half-year point
5 Jul, 2012, Frankfurt
• Rental performance in the Frankfurt office space market at the long-term average in the
first half of 2012
Roughly 224,000 sq. m were rented in the Frankfurt office space market (including Eschborn and Kaiserlei) in the first six months of this year. This means the half-year result is the same as the average for the past five years (the average being 226,000 sq. m) and 9% above the average for the last ten years (that average being 207,300 sq. m). Such strong results for the start of the year – with 130,000 sq. m rented out by the end of March – haven't been achieved for the last three years. In the second quarter, a total of 94,000 sq. m were rented.
According to the international commercial real estate consultancy Cushman & Wakefield
(C&W), banks and financial services were particularly lease-strong up until the end of
June. "In the first half of 2012, this sector contributed around 27% of rental turnover
with nearly 60,000 sq. m and has now nearly reached its total annual result for 2011 already
(65,000 sq. m)", reckons Dennis Stern, Head of C&W's Frankfurt Office Space Leasing
department. "Significant contributions to this really good result came from three leases
all north of the 10,000 sq. m mark: 13,600 sq. m from SEB Hypothekenbank AG; 13,000 sq. m from
Kreditanstalt für Wiederaufbau; and 12,700 sq. m from Union Asset Management Holding AG. But
even in the small to medium-sized segment, banks and financial service providers signed
numerous deals. This is a positive sign for the financial centre of Frankfurt."
The number of vacancies is continuing to fall in the Frankfurt market. For the fifth quarter in succession, the vacancy rate has fallen – it now stands at 13.5% (the first quarter was 13.7 %). From a total stock of office space of 12.01 million sq. m, 1.62 million sq. m are available for short-term leasing.
The quantity of building completions was below average in the first half of 2012. Until now,
only 37,700 sq. m have been completed, the majority of which were pre-leased already. 56,700
sq. m of newly completed office space is expected during the second half-year, and all of this
space has already been leased prior to completion.
At the half-year point, the high-end lease price continues to be stable at 34.00 Euros/sq. m/month. The trend in lease prices is the result of great consistency in early summer: the scope of incentive packages offered and the level of rent in the periphery locations are currently less volatile.
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