Cushman & Wakefield noted Q1 office take-up of around 131,000 sq m in Hamburg. This represents an increase of 4 percent compared to Q1 2021 and exceeds the Q1 ten-year average by more than 12 percent.
Medium-sized space segment largest contributor to office take-up
In the first three months of 2022, as in the same period last year, four large deals of over 5,000 sq m were registered, together totalling 29,000 sq m and thus 22 percent of total office take-up. Development projects accounted for 23,000 sq m. The largest letting was to VTG AG, of around 11,500 sq m in the new "Green Innovation Lab" project in the Elbbrückenquartier in HafenCity.
Whereas a year ago lettings of over 5,000 sq m was the largest contributor to take-up (36 percent), in the first three months of 2022 deals of between 1,000 sq m and under 3,000 sq m made the largest contribution(26 percent).
Companies from the industrial sector make largest contribution to take-up
Industrial companies continued to make the largest contribution to take-up in the first quarter of 2022. Nine leases for a total of more than 24,000 sq m of office space were concluded in this sector. With eight lettings totalling around 21,000 sq m, companies from the transport, traffic and logistics sector ranked second. The greatest number of lettings (18) were to consultancy companies, totalling some 10,000 sq m.
Prime rent rises for the 3rd consecutive quarter to current EUR 31.50/sq m per month
The implementation of new workplace concepts is leading to a further increase in interest in high-quality office space in city centre locations and new buildings. As a result, the achievable prime rent rose to a third consecutive record in Q1 2022, to stand at EUR 31.50/sq m per month. This corresponds to a year-on-year increase of EUR 1.50 or around 5 percent.
The weighted average rent also reached a new high in a year-on-year comparison. It is EUR 18.15/sq m per month across all building classes. This is EUR 0.25 euros or around 1 percent more than at the beginning of 2021.
Tobias Scharf, Head of Office Agency Hamburg at Cushman & Wakefield, explains: "Projects with a long lead time are difficult to calculate due to the current inflationary trend, ongoing material bottlenecks caused by supply chain problems and, as a result, further increases in construction costs. In order to minimise the risks for owners and users, leases are being discussed more intensively and value protection clauses are becoming an important factor in the negotiations. Precisely for this reason and because of the great interest in new construction space, we expect significantly rising prime rents in the remaining course of 2022."
Hamburg city centre is the most sought-after submarket
As the central locations continue to be particularly attractive for Hamburg office users due to transport links, the submarkets City Centre, HafenCity and City South were among the winners in Q1 2022. With around 32,000 sq m or 24 percent of take-up, City Centre remains the most sought-after submarket, followed by HafenCity with just under 29,000 sq m or 22 percent and City Süd with 10,000 sq m or 7 percent.
2022 expected to be closer to ten-year average
Due to the increased demand across all space segments, C&W expects take-up of 490,000 sq m in 2022. This would be significantly closer to the ten-year average of 497,700 sq m than last year's 474,000 sq m.
Availability declines year-on-year
In the past twelve months the vacancy rate fell by 0.2 percentage points to 4.0 percent. Absolute vacancy fell by 17,100 sq m to 605,000 sq m. In the course of 2022, the supply of available office space is expected to continue to increase moderately. In peripheral locations, more strongly rising vacancies could exert increasing pressure on rents.
Continued large construction volumes and high pre-letting rates
In Q1 2022, around 67,000 sq m of new and refurbished office space was completed in Hamburg. Of this, 82 percent had already been let or allocated to owner-occupiers at the time of completion. The largest completed property is the first section of the extension to the Beiersdorf Campus in Hamburg North-West providing around 45,000 sq m of office space which is used entirely by Beiersdorf itself.
A total of 462,000 sq m of office space is under construction. Of this, 63 percent has already been allocated to users. In addition, there are concrete plans for developments accommodating 908,000 sq m of office space, of which more than a third has already been let.