Cushman & Wakefield, one of the world’s largest real estate consultancies, has recorded take-up of around 195,000 m² in Hamburg’s office letting market in the first half of 2024. This is 14 per cent less than in the same period of the previous year (226,000 m²) and the figure is 22 per cent below the 5-year average for the first half of the year (2019–2023). In the past ten years, the 200,000 m² mark was only undershot in the comparative period in 2020 with the outbreak of the Covid-19 pandemic.
Tobias Scharf, Head of Office Agency and Branch Manager of Cushman & Wakefield in Hamburg, comments: “Changing occupier requirements, economic uncertainties and protracted decision-making processes have led to a weak half-year result. Although urban lettings and owner-occupier construction starts mitigated the negative impact, the application situation shows that large users with a space requirement of over 10,000 m² are still reluctant to take on new tenants.”
Take-up of space: owner-occupier construction starts and the public sector bring major deals and drive take-up of space
- 256 transactions were counted in the 1st half of 2024. This corresponds to an increase of 4 per cent compared to the same period last year.
- The largest share of office space take-up (22 per cent) was accounted for by the 10,000 m² and above size category. Here, three lettings from the 2nd quarter totalled around 43,000 m². Deals of less than 500 m² followed in second place with 40,800 m² in 158 deals (21 per cent), closely followed by deals between 500 and 1,000 m² with 40,700 m² in 59 deals (also 21 per cent).
- The largest deal was the owner-occupier construction start of the “Borx” commercial building in Normannenweg in City South with office space of around 22,000 m² by Strabag. At around 18,000 m², the construction company will use the majority of the building itself. Owner-occupier construction starts accounted for 13 per cent or 25,200 m² of total take-up in the first half of the year.
- This is followed by the interim letting of 14,900 m² by the Hamburg Finance Authority in the former HASPA headquarters on Adolphsplatz in the city centre and the expansion of the police force’s space in Überseering in City North by around 10,000 m². Overall, public sector lettings totalled 32,800 m² in the first half of the year, which corresponds to a share of 17 per cent.
- As with the long-term average, letting activity up to the end of June was concentrated in the CBD and the city centre locations HafenCity and City South in the same order of priority. 104 deals totalled 96,600 m², which corresponds to half of total take-up.
- Cushman & Wakefield expects a letting performance of only around 400,000 m² in 2024 – the lowest result in recent years after the pandemic year 2020.
Rents: Prime rent increases, average rent declines
- Compared to the previous quarter, the prime rent rose by EUR 0.50 to EUR 34.50/m² per month, an increase of 5 per cent over the 12-month period. The high demand for high-quality space in prime locations is expected to cause prime rents to rise further in 2024.
- The weighted average rent of all agreements concluded in the past twelve months is listed at EUR 20.00/m² per month, which corresponds to a decrease of EUR 1.45 compared to the same period of the previous year.
Vacancy rate: supply of space rises sharply
- The vacancy rate increased by 0.6 percentage points year-on-year and stood at 5.0 per cent at the end of June 2024. The absolute vacancy rate increased by 80,400 m² to around 707,000 m². The vacancy rate was last higher in the 1st quarter of 2017.
- The supply of sublet space available at short notice has fallen compared to the previous year: at the end of the 2nd quarter, it was around 51,000 m² and therefore 8 per cent lower than at the end of June 2023.
- Vacant existing space, space that is released for subletting and the reduction in space by many companies for new lettings will cause the vacancy rate to continue to rise moderately in the coming years.
Completions: Further decline in construction volume
- In the first half of 2024, 68,300 m² of new and refurbished office space was brought onto the market in Hamburg. 94 per cent of this was let or occupied by owner-occupiers at the time of completion. The largest completion is the “EDGE ElbSide” in HafenCity with around 22,000 m² of office space, most of which is let to Vattenfall.
- The construction volume at the end of the 2nd quarter was 460,700 m², 15 per cent below the previous year’s figure – 33 per cent of the space is still available.
- The decline in construction volume is mainly due to the restraint in speculative projects and the temporary suspension of construction work on the Signa projects.
