Berlin Office Market Profile - Q2 2012 - Jones Lang LaSalle

Change* 12 Month
Summary Statistics Q4 12 Q-o-Q Y-o-Y Outlook
Take-up (000s sqm) 142 12.4 % 1.5 %
Vacancy (000s sqm) 1,441 0.8 % -0.4 %
Vacancy Rate (%) 8.5 10 bps 0 bps
Prime Rent (psm) €264 0 % 2.3 %
U/C (000s sq m) 359 -5.2 % 13.3 %
Change*
12 Month
Q4 12 Q-o-Q Y-o-Y Outlook
Capital Value (psm) €5500 3.1 % 5.5 %
Prime Yield % 4.80 -15 bps -15 bps
* % Change for Prime Rents and Capital Values calculated using local currency
Market Overview
Office take-up maintained its momentum into Q4 2012, with
take-up reaching 142,200 sq m, bringing the annual level to
a total of 544,000 sq. m, the highest level since 2006.
For the first time in the past decade, ten large deals for
above 10,000 sq m were signed within a year. Two of these
were confirmed in Q4 2012, including one by PwC in the
new Europacity development close to the central railway
station. Take-up exceeded the five year average by 12%.
Despite the above-average demand, vacancy rate edged
up by 10 basis points q-o-q to reach 8.5%. No increase in
vacancy rate is expected for 2013 due to the strong ongoing
pre-letting activity for new developments.
Completions fell away in Q4 2012 by 47% q-o-q. Annual
completions were just under 110,000 sq m, were 25%
below the 10-year average. “Europacity”, next to the central
station remains the largest development at the moment.
Going forward, completions are expected to be low with no
speculative development in the pipeline. Prime rents
remained unchanged at € 264 / sq m after rising by 2% in
Q2 2012. The growing shortage of supply, particularly in
key office locations has, however, filtered through, with the
weighted average rents now standing at € 152.40 / sq m
pa. Rents for modern office space in the Inner City – West
submarket remained unchanged at € 192 / sq m.
Berlin was the largest investment market in Germany with
an annual transaction volume of almost €4 billion, 40% of
which was invested in office properties. Due to the
continuing strong demand for Core and Core+ properties,
the prime yield declined to 4.80% y-o-y.
Berlin Office Market Profile - Q4 2012
Figure 1: Take-up
000s sqm
600
500
400
300
200
100
0
2002
2003
2004
2005
2006
2007
Figure 2: Supply and Vacancy Rates
000s sqm
1,800
1,500
1,200
900
600
300
0
2002
2003
2004
2005
2008
2009
2010
Take Up 10yr Average
2006
2007
2008
2009
2010
Vacancy Total Vacancy Rate
Figure 3: Prime Rents and Rental Growth
400
350
300
250
200
150
100
50
0
2002
2003
2004
2005
2006
2007
2008
2009
2010
Rental Growth Prime Rent
2011
2012
Vacancy Rate %
12
10
8
6
4
2
0
2011
2011
2012
Prime Rent (psm pa) Annual Rental Growth*
Figure 4: Prime Yields
Prime Yield (%)
5.75
5.50
5.25
5.00
4.75
4.50
2012
Q4 98
Q4 99
Q4 00
Q4 01
Q4 02
Q4 03
Q4 04
Q4 05
Q4 06
Q4 07
Q4 08
Q4 09
Q4 10
Q4 11
Q4 12
Prime Yield 10 Yr Ave 20 Yr Ave
Source all Charts: Jones Lang LaSalle
10
5
0
-5
-10
-15
-20

Jones Lang LaSalle Contacts
Ruediger Thraene
Team Leader Office Leasing
Berlin
+49 30 20 39 80 311
ruediger.thraene@eu.jll.com
Berlin Office Market Profile – Q4 2012
Pulse reports from Jones Lang LaSalle are frequent updates on real estate market dynamics.
www.joneslanglasalle.eu
Ferdinand Rock
Head of Office Leasing, Germany
Munich
+49 (0) 89 290088 40
ferdinand.rock@eu.jll.com
Helge Scheunemann
Head of Research, Germany
Hamburg
+49 (0) 40 350011 225
helge.scheunemann@eu.jll.com
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