Freelancers, seeking office space, to provide German office impetus

Investors in German office properties should be looking carefully at Germany’s regional cities, particularly in western Germany, where the amount of office workers is expected to grow by 80,000 annually, creating extra demand of 2 million square metres. The demand from self-employed people, no longer wanting to work out of a “home office”, will provide fresh impetus to the office market, say consultants Wüest & Partner in a new study.

The new study, "Perspektive Büroflächenmarkt Deutschland 2014", which was compiled in collaboration with research firm Ottenströer, analyses the trends of the past five years in office investment. The study concludes that the above figures could double if Germany continues to enjoy the same dynamic growth it has seen over that period.

This would particularly benefit cities and their near suburbs in the western part of the country – although it’s not good news for office vacancies in rural areas, C-cities, and the far-out peripheries of the A- and B-cities, where high vacancy rates will become even more ingrained.

The study also highlights how freelancers and self-employed workers will become the most dynamic sector for the office markets of the future, followed by sub-segments of health and social services, IT and communication, manufacturing, finance and insurance and administration.

The researchers have identified a trend ‘away’ from working in a ‘home office’. According to the Federal Statistics Office, about 8.8% of non-self-employed workers could do some work from home in 1996. This rose to its peak of 9.7% in 2008, and has since fallen to 7.7%, and is still in a downward trend.

In pointing to cities with an attractive risk-return profile, Wüest & Partner highlighted Bonn as offering particularly good perspectives give its low volatility, steady rental increase and low level of speculative construction. Among eastern German cities, Jena stood out with the best profile, while others rated highly were Dresden, Rostock and Potsdam.