Average asking office rents in Germany grew faster in the country's secondary or B-cities in the second half of 2016, according to new research released by investor and asset manager Corpus Sireo and the Bonn-based research institute Empirica. At an asking rent of €9.92 per sqm per month, the city of Bonn itself has the highest average rent of the B-cities.
The study, "Germany 21: Regionaler Büromarktindex", demonstrates that the average asking rent in the 14 B-cities surveyed (Aachen, Bonn, Bremen, Dortmund, Dresden, Essen, Hanover, Karlsruhe, Leipzig, Mainz, Mannheim, Münster, Nuremberg and Wiesbaden) increased by 1.8% to €8.42 per sqm. By contrast, the average rent per sqm increased by only 0.2% to €13.66 in the Big Seven cities (Berlin, Düsseldorf, Frankfurt, Hamburg, Cologne, Munich, Stuttgart).
The cities of Aachen, Hanover, Mannheim and Wiesbaden were outperformers, with rents rising by an above-average 4% in H2 2016, the research shows.
With an average office rent of €9.92 per sqm, Bonn remained the most expensive B-city. Conversely, rents fell in Essen (by an average of 1.6% to €8.17), Mainz (by 0.8% to €9.57 per square metre) and Dresden (average rent of €6.85 per sqm, and for the first time overtaken by rival Leipzig at €7.22, offering a yield of 5%). In fact, Dresden's performance was the weakest of the cities surveyed, with nearly all office rents in the city falling by 1.1% on average.
In the top seven cities, Berlin witnessed strong growth of 5% to an average of €12.92 per sqm, which placed it in the number one position, followed by Cologne with rental growth of 3.1% (to €11.04). In comparison, the office market in Frankfurt weakened slightly in the second half of 2016, where the average asking rent fell by 3.3% to €14.99 per sqm. Rents also fell in Hamburg by 0.8% to an average of €12.96. Peak Munich rents were €34.70, putting it just behind Frankfurt.
Separately, a new study released by Apleona GVA (formerly Bilfinger Berger) and carried out by reputed market researchers BulwienGesa examines rent price trends over the past five years in Germany. Its resulting list of the ten German office markets with the highest rent price increases over the past five years includes many more B- and C-markets than A-markets.
Heading the list are Berlin (+86 %) and Munich (+71 %), followed by Leipzig, Dresden, Potsdam, Erlangen, and Münster. Hamburg (+36 %) is in eighth place, with Regensburg and Mannheim in tenth. In the secondary cities of Aachen and Freiburg im Bresgau (about +30 %), prices also climbed more than in Düsseldorf or Frankfurt, for example.
The market prices were calculated using the average rent and initial net yield. Notable is the performance of Leipzig, where average office rents have risen much more sharply than those in the A-rated locations – confirming the trends highlighted in the Corpus Sireo/Empirica study.