Software, gaming industries increasingly key in German office sector

The latest German market report from property advisor Colliers International highlights the increasing demand from the TMT sector and creative industries, and their growing impact on both the German office market and wider economy. The research reveals that these sectors accounted for 14% of leasing agreements signed in Germany over a five year period (2008 – 2013), around 1.7million sqm take-up, the second-highest number of lease agreements in the German office market after consulting businesses.

The report states that the key influencers in demand are rents and location, and as such creative businesses are currently leasing smaller office space compared to other industries, with rental levels recorded at an average of 7% below the overall market average.

The software and gaming industry has dominated creative sector office requirements, accounting for almost half (47%) of take-up in the last five years. This was more than double its nearest competitor, the advertising industry, which had only 21%, followed by the design industry with 9%.

The report reveals – not surprisingly - that Munich is the so-called capital of the creative industry, with the highest number of rental agreements (870) and take-up volume (535,500 sqm) over the time period and a market share of 16%. Of this, the software and gaming industry took more than 50% of take up. In Munich, creative businesses can also expect to pay the highest rents - on average recorded at €15.58 per sqm, although this is 7% below the overall market average.

Other cities indicated lower rental prices but showed different strengths in other sectors. Dusseldorf was ranked second most expensive at €13,67 per sqm, but is the strongest city for the design industry in Germany, with almost 40 per cent (80,200 m2) of total take-up volume.

Andreas Trumpp, head of research at Colliers International in Germany, commented, “The creative industry is a prominent pillar of the current German office market. A range of different focal points have been identified in each of the different city locations, as each location associates with different industry specific needs.

"The overall demand in the creative industry is robustly increasing as it becomes a more popular market. As a result of this, we expect to see the software and gaming industry particularly benefit, as its high degree of innovation strength and the on-going digitalization of work/life become more significant to the leasing market in the future.”