Commercial Real Estate: Europe: Difference between revisions

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 https://www.dbrsmorningstar.com/document/408146.pdf?Expires=1680111844&Policy=eyJTdGF0ZW1lbnQiOlt7IlJlc291cmNlIjoiaHR0cHM6Ly93d3cuZGJyc21vcm5pbmdzdGFyLmNvbS9kb2N1bWVudC80MDgxNDYucGRmIiwiQ29uZGl0aW9uIjp7IkRhdGVMZXNzVGhhbiI6eyJBV1M6RXBvY2hUaW1lIjoxNjgwMTExODQ0fX19XX0_&Signature=ce819iD1KguNRjo8oNXFkR6UPLSAxSJG4CR991iNaqJr2HQvdpqzFSXm29ylXYBHH9llSe3OkZmuX8YlxlFuz0Dk5DjTFANzFQmlPhvQTg57eCpq0vje06CYOaPRFnPwDnwgadrExhH1dD8qovsaMWai9IUauymmYJgfiy8P75ROLnXiLWfmXUAQCr8JLt3lJsBTHuUpRGb~vt4-tnOKdiJkAq4oBfmuwcHVikd5YKbWWSwHDNOmpADZYTQFo8Q~KIZ-K0kegidZSJN5GOLp6BmhkIK7KfiyXndgOLHVU~TKIbuRm4agdF5JpiQ7m7lHRZnrjyJr0tyYuGAGRe-qHg__&Key-Pair-Id=KNWV36WLG7L4J
+== Germany ==
+[[File:Germany RE 1.PNG|thumb|503x503px|Office Space Take-up incl . owner occupier]]
+=== Office Market ===
+<u>Savills Research</u>
+Office markets:
+* Vacancies from 2% in 2019 to 4% in 2022, and 5% forcasted in 2023
+* Already observing unmistakable indications of falling demand for space, for example in the form of an increasing supply of sublet space and a lower number of rental enquiries. As a consequence, the increase in vacancies of recent years will continue and possibly even accelerate.
+* Sudden shift in demand preferences towards higher quality office space.  As a result, some of the space that was previously still marketable no longer meets user needs and has fallen vacant
+Future headwinds:
+* Volume of completed space will be comparatively high, at least in the next two years, and will ensure a greater supply of modern office space
+* Economic downturn will, at least temporarily, bring the cost side back into sharper focus for companies - this will also influence their willingness to pay for office space
+* Increased demands on office space quality are offset by a lower quantitative demand. According to our impression, at least most large users want to significantly reduce their per capita office space footprint against the backdrop of the hybrid working world that is becoming established
+In view of this mix, downward pressure on rents is likely to increase. In 2024, too, the downside risk outweighs the growth opportunities for rents in view of further rising vacancy rates. This could change from 2025 onwards<ref>https://en.savills.de/research_articles/259694/336541-0</ref>
+[[File:Germany RE 2.PNG|thumb|501x501px|Vacancy incl. Space for subletting]]
+<u>JLL Research</u>
+- Office take-up of 3.5 million sqm in the country’s seven major real estate strongholds, exceeding the same period last year by 6.5%.
+- ‘Flight to Quality’ trend. In 2022, Grade A space accounted for around 70% of new lettings.
+- For 2023, JLL anticipates a decline in demand of around 10% over the year as a whole due to the imminent economic downturn.
+-  Vacancy rate across the Big 7 increased by just under 9% year-on-year to 4.7 million sqm, with the vacancy rate rising accordingly from 4.5 to 4.9%
+-  JLL expects the volume of vacancies to rise more sharply, especially for poorer quality office space. JLL therefore expects the vacancy rate to increase by 60 basis points over the year, to reach 5.5%.
+- . In times of crisis, subletting to reduce space and costs is always an option. Currently we have recorded a volume of 735,000 sqm on offer on the market in this form. It makes up just under 16% of total vacancies, which is only a slight increase of 2 percentage points compared to 2021.
+- Building prices also improved towards the end of the year. The Federal Statistical Office’s Building Price Index rose by just 2.8% for office buildings at the end of the third quarter, down from 6.8% in the second quarter and 4.7% in the first quarter of 2022
+- Around 1.8 million sqm of space is currently in the pipeline for this year, most of which is already under construction. Currently occupied or pre-let space makes up 55% of this, but this share is likely to rise further over the course of the year.<ref>https://www.jll.de/en/trends-and-insights/research/office-market-overview</ref>
 == References ==