Cushman & Wakefield, one of the world’s largest real estate consultancies, recorded take-up of 288,500 m² for the Munich office market in the first half of 2024. Around 150,000 m² of this was achieved in the 2nd quarter. The half-year result is therefore 21 per cent above the same period of the previous year, but 19 per cent below the 10-year average.
Matthias Hofmann, Acting Head of Office Agency Munich and Head of the Munich branch of Cushman & Wakefield, comments: “A slight recovery is noticeable on the commercial property market, with demand increasing more significantly, particularly in central and well-connected locations. Tenants are still prepared to pay high rents for top quality. Nevertheless, prospective tenants remain hesitant when it comes to making decisions – all the more so when it comes to signing large contracts.”Take-up: half-year result for 2024 exceeds previous year
- The take-up of 149,700 sq m recorded in the 2nd quarter is 11 per cent below the 5-year average for each 2nd quarter. Nevertheless, the result reflects a positive trend, as the take-up of space in the 2nd quarter is the highest of the past 6 quarters.
- At 186, the number of agreements signed in Q2 2024 was higher than in the previous quarter (149) and increased overall in the first half of the year to 335 agreements compared to the previous year (307).
- Property quality A buildings accounted for around 54 per cent of take-up. This figure corresponds to the average of the past ten quarters.
- In the City Centre East submarket, the largest share of take-up was realised in the 2nd quarter at around 25 percent.
- By June 2024, a total of seven deals had already been concluded in the 5,000 m² and above size category. In contrast, there were only six deals of 5,000 m² or more in the entire previous year. In the 2nd quarter, Bayerische Versorgungskammer realised the largest deal of the year to date. It will open its new headquarters with around 25,000 m² of space in the “Tridea” project development as an owner-occupier. The second-largest letting remains the letting by Bayerische Allgemeine Versicherung AG (around 11,600 m²) in "The Source" from the 1st quarter.
Rents: Prime office rents reach 51.00 euros/m²
- In the quarter under review, the prime rent in Munich exceeded the previous quarter’s high of EUR 51.00/m² per month and reached a new record level. Compared to the 1st quarter of 2024, the prime rent increased by EUR 1.00/m². Compared to the 2nd quarter of 2023, this corresponds to an increase of EUR 6.50/sq m.
- The space-weighted average rent for new lettings in the past twelve months was EUR 23.80/m² per month, which is EUR 1.35/m² lower than in the same quarter of the previous year.
Vacancy rate: 6.3 per cent of all office space available at short notice
- Vacant office space in Munich totalled 1.37 million m² at the end of the 1st quarter. This corresponds to a vacancy rate of 6.3 per cent, which is 0.7 percentage points higher than the figure for 2023. Compared to the previous quarter, there was a slight increase of 0.3 percentage points.
- A total of 123,800 sq m of the vacant space in Q2 2024 is available for subletting. This represents a slight decrease compared to the previous quarter and an increase of 20 per cent compared to the same quarter of the previous year.
Completions: Half of the completed space has been pre-let
- In the first six months of 2024, around 139,000 m² of office space was completed (new build or total refurbishment). Around more than half of this (54 percent) was already let or occupied by owner-occupiers at the time of completion. Completions in the 2nd quarter include “Der Bogen” (64,300 m²) in the City Centre East submarket and “FABRIK” (21,000 m²) in the City South - South West submarket.
- Around 700,000 m² of office space is currently under construction. 32 per cent of this space is already let or occupied by owner-occupiers.
