Experts at international real estate consultancy firm Cushman & Wakefield (C&W) have registered 132,000 square metres of take-up for the Munich office market in the second quarter of 2021. This is only a slight increase on the low-turnover previous quarter (103,900 square metres). The half-year result of 235,900 square metres thus falls 28 % short of the 327,200 square metres achieved in the first half of 2020 36 % short of the H1 ten-year average (370,700 square metres).
Despite the figures, Hubert Keyl, Head of Office Agency Munich Cushman & Wakefield Germany, takes a positive view of the market: "Market participants are still acting cautiously and have not yet returned to the level seen before the COVID 19 pandemic. But take-up is rising slightly again. As a result of the experiences of the past months, we expect more desk sharing implementation by companies on the one hand and an even greater importance placed on building and location quality on the other. Against this backdrop, demand for premium space in the Munich city area with optimal transport links will increase. Overall, we expect total annual take-up to be just over 500,000 square metres."
IT and industrial sectors with the highest turnover
As usual, companies from the IT sector are the largest source of demand. The 58 lettings in this sector in the first half of the year totalled 48,600 square metres. These companies thus contributed 21 % to total take-up. The city centre was particularly interesting for IT companies. Almost half of the leases they concluded were for space here.
The industrial sector follows in second place with take-up of 15 %, some 34,900 square metres. The major contributor to this total was Wacker Chemie's leasing of 14,100 square metres in the Werksviertel. This is also the largest deal of the year so far and the only one above the 10,000m² mark.
Vacancy rate rises slightly
Due to the ongoing decline of new lettings since 2020, vacancy has increased over the past twelve months. Compared to the same time last year, it has risen by 37%, or 218,900 square metres, to 806,400 square metres. The vacancy rate in the market area is thus now 3.8%, compared to 2.8% a year ago.
In the second quarter, 5,400 square metres of modern office space were completed. This brings the completion volume so far in 2021 to 57,800 square metres. This is 51 % less than the average of the past five years (117,200 square metres). A further 252,400 square metres of office space will be completed by the end of the year. Of this, 68 % has already been pre-let. In addition, approximately 970,000 square metres of office space is under construction and are scheduled for completion in 2022 and 2023. The pre-letting rate here is currently 24%.
Prime rent rises to record high of 40 euros per square metre per month
The achievable prime rent reached a new historic high in the second quarter. It rose by a good 1 % from 39.50 euros to 40 euros per square metre and month. The weighted average rent for new leases in the past twelve months is 21.19 euros per square metre per month. This is 0.34 euros higher than in the first quarter of 2021, but 0.96 euros lower than at the end of the first half of 2020.
