Property Market Trends

Frankfurt, Hamburg and Munich all saw their second-highest ever levels of take-up in 2001 But vacancies are expected to increase this year in all three markets due to stronger development activity and a lower level of pre-lettings.

Munich, traditionally Germany's tightest office market, is forecast to be the best-performing centre over the next two years in terms of economic growth and job creation. But the capital Berlin, which has suffered from a chronic oversupply of offices, will continue to lag behind, forecast Catella.

Berlin is Europe's third biggest office market after Paris and London, with a total stock of 183 million sf. Even though take-up in 2001 was above the long-term average at 4.4 million sf, the total vacancy rate is still running at 7%. Eureal calculates that prime rents in the City-Ost district are currently static at €18.80 per sq m per month ($18.50 per sf per annum).