German office markets outshine 2012's expectations
Germany's office markets outperformed expectations in 2012, according to a report by Property Magazine International, publisher of European property markets.
The report found that despite anticipated poor performance in its markets, Germany’s office sector performed very well over 2012.
It had already been established that there would be no repeat of the record results of 2011, which saw prime rents rise and vacancy rates fall.
Piotr Bienkowski, executive chairman of BNP Paribas Real Estate Germany commented on the findings saying: “It had already been clear that no repeat of the record result of the previous year was to be expected, particularly in view of the resurgence of the debt and euro crisis.”
Despite slumbering economic growth in 2012, Germany’s office space take-up was well above the long term average, at 3.25m sq ft.
“This shows that business firms are on the whole expecting to see only a dip in economic activity rather than any renewed recession. This assumption is also backed by the very strong fourth quarter of 2012, which by itself generated take-up of over 900,000 square metres,” said Mr Bienkowski.
Looking onto 2013, office markets look set to be sustained, with moderate economic growth in the first half of the year, leading onto strong performance in the latter.
“The decline in vacancy will continue for the time being, even if the reduction is slower than before, while the fall in the supply of modern office premises will proceed somewhat more dynamically.
“So there is at least a possibility of a slight increase in top rents in some locations, although the overall economic conditions suggest that at least in the first half rental price levels will remain predominantly stable,” says Bienkowski, summing up the near-term prospects.