Office Market Report Munich 2010 / 2011

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Office Market Report Munich 2010 / 2011

Office Market Report Munich 2010 / 2011

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  • 1. Office Market Report MUNICH 2010/2011
  • 2. PREFACE.The trend in the Munich office real estate market, which emerged in 2010, has been confirmed and cannow be shown in figures.Ellwanger & Geiger calculated office space rentals of approximately 590,000 m² in 2010 (including around12,000 m² owner occupiered) , which shows an increase of approx. 12%, compared to 2009. This is espe-cially a result of brisk rental activities in downtown Munich (approx. 47%) as well as the 2,000 m² rentals(approx. 50%).The strongest sectors were consulting agencies and law firms with approx. 17.8% of therental activities of up to 2,000 m². There were a few major lettings (> 5.000 m²) in 2010. However expecta-tions for 2011 quite positive because of rising demand and the already existing applications.The weighted average office space rent remains stable compared to 2010 and is around € 14.20 /m². Theweighted prime rent is almost unaffected by the market activity in 2010 and is constant at € 28.00 /m².A vacancy of about 1.8 million m² (8,3 %) was determined at the end of 2010. That means a vacancy rate of8.3%. It is not expected that the vacancy rate will continue to increase significantly because new officebuilding constructions keeps decreasing noticeably.A stable demand situation will thus support the upward movement of the Munich office rental market andis expected to bring a consolidation over the next few months, a slight reduction at best. Generally, due tothe positive economic trend in Germany, an increasing positive development in the office rental marketcan also be expected in 2011. This could mean office space rentals beyond 600,000 m².KEY FIGURES.ECONOMIC DATA OFFICE MARKET DATA 2010Area 310.4 km² Take-up 590,000 m²Population ca. 1,370,000 Prime rent 28.00 €/m²Purchasing power/resident 25,237 € Average rent 14.20 €/m²GDP/resident 56,655 € Prime yield 4.8 %Employment rate 74.5 % Space inventory ca. 21.8 Mio. m²Trade tax multiplier 490 % Vacancy rate 8.3 %Source: LHSt. München, Referat für Arbeit und Wirtschaft Source: Research Bankhaus Ellwanger & Geiger KG , 12/31/2010 2
  • 3. DEVELOPMENT OFFICE MARKET.OFFICE SPACE TAKE-UP AND VACANCY RATE RUNNING DEALS Take-up (m²) Vacancy rate Aufbau West Innovati- 1.200.000 12,0% onspark GmbH ca. 15,000 m² 1.000.000 10,0% Munich-Sendling _________ 800.000 8,0% Franzis Verlag GmbH ca. 11,400 m² 600.000 6,0% Haar near Munich _________ 400.000 4,0% Rodenstock GmbH 200.000 2,0% ca. 11,000 m² Munich-Westend _________ - 0,0% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 GlaxoSmithKline GmbH & Co.KG ca. 11,000 m² Munich-BogenhausenPRIME RENT- AND AVERAGE RENT in €/m² _________ Average rent (€/m²) Prime rent (€/m²) Amazon.de ca. 8,800 m² 35,00 Muc.-Parkstadt-Schwabing _________ 30,00 Heye Group 25,00 ca. 8,600 m² Munich-City 20,00 _________ 15,00 VBG Verwaltungsberufs- 10,00 genossenschaft ca. 7,500 m² 5,00 Munich-Westend - 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 3
  • 4. DEMAND DISTRIBUTION.TAKE-UP BY RENT LEVEL SECTOR DISTRIBUTION IN % 300.000 250.000 13% 7% 8% 200.000 7% 8% 150.000 7% 100.000 7% 18% 50.000 7% 0 5% 13% < 10 €/m² 10-15 €/m² 15-20 €/m² 20-25 €/m² >25 €/m²TAKE-UP BY SIZE Pharma/Health Care Banks, insurance, financial services 140.000 Construction, property 120.000 Consultants, attorneys, auditors 100.000 Computer, IT, telecommunications 80.000 Leisure, education 60.000 Trade and distribution 40.000 Industry 20.000 Media, publisher 0 Public administration < 500 m² 500 - 999 1.000 - 2.000 - > 5.000 m² m² 1.999 m² 4.999 m² Other services 4
  • 5. OFFICE SUBMARKETS IN COMPARISON. SUBMARKET RATIO LOCATION TAKE-UP (m²) RENT AL PRICE VACANCYRATE RANGE(€/m²) City Centre 68,100 13.0 – 33.0 3.1% City north 20,500 11.5 – 24.5 4.1% City east 55,700 8.5 – 26.0 8.8% City south 49,300 8.0 – 18.0 6.5% City west 91,800 10.0 – 25.0 8.5% Urban area north 44,200 8.0 – 22.0 10.9% Urban area east 35,400 8.0 – 17.0 6.4% Urban area south 18,700 7.5 – 14.0 24.0% Urban area west 63,300 8.5 – 15.0 6.9% Periphery 143,000 7.5 – 14.0 11.8% 5
  • 6. CONTACTS.BANKHAUS ELLWANGER & GEIGER KGHerzog-Rudolf-Str. 180539 MunichPhone 089/179598-0, Fax 089-179598-55www.privatbank.de Alexander Zigan Björn Holzwarth Head of office letting and retail letting Head of commercial real estate Munich Phone 0711-2148-192 Phone 089-179594-20 bjoern.holzwarth@privatbank.de alexander.zigan@privatbank.de Dieter Mendl Yvonne Strelow Senior Consultant Office Letting Senior Consultant Office Letting Phone 089-179594-22 Phone 089-179594-25 dieter.mendl@privatbank.de yvonne.strelow@privatbank.de Stephan Schörnig Senior Consultant Office Letting, Tobias Wäscher contact person Research Consultant Office Letting Phone 089-179594-26 Phone 089-179594-24 stephan.schoernig@privatbank.de tobias.waescher@privatbank.de Thomas Blessing Markus Laermann Consultant Retail Letting Senior Consultant Investment Phone 089-179594-23 Phone 089-179594-10 thomas.blessing@privatbank.de markus.laermann@privatbank.de DISCLAIMER: The preparation of this study was conducted with great care. Nevertheless ELLWANGER & GEIGER Privatbankiers has not verified the accuracy of the estimates. Therefore we make no guarantee about it. We ask for understanding. 6