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Office rents in Germany increas in 2011 by two percent. At the same time the vacancy rate falls to 11.2 percent. This is one of the results of the current “Deka Real Estate Monitor”. One reason is the sharp rise in German economic performance. Also the solid labor market provides greater demand for space. In addition to support rising wages and higher inflation support the rent growth. “The growth in Germany in 2011 will perform above the Euro countries and well above levels before the financial crisis. This are good prospects for the German commercial property market”, says Dr. Matthias Danne, Real Estate Board of DekaBank, during the presentation of the study. For the German office market the Real Estate Research of DekaBank expects an average total income of 4.6 to 5.7 percent a year between 2011 to 2015. This is below the European average of 6.3 percent. “One reason is the stability of the German market during the financial crisis,” said Danne.
Overall the DekaBank analysts expect a two-part development of the economy in Europe next year. In countries with structural problems, such as Spain, Ireland, Portugal, Italy and Greece, the growth rates are significantly lower than before the financial crisis. On the other hand countries, such as Germany, Austria, Finland and the Netherlands, benefit from the expected global economic growth by four percent next year. “Due to their high competitiveness the structurally strong countries in Europe can profit from the current low interest rate environment and the global economic upturn. Therefore we expect strong economic growth for these countries in the coming years,” said Dr. Karsten Junius, Head of Capital Markets and Real Estate Research DekaBank. The differences in development, however, will impact the European commercial property markets in the medium term.
Read the full article here (German only): Deka Immobilien Monitor 2011
Load the full pdf report file (56 pages, 5 MB, German only):
PDF Report: Deka Real Estate Monitor 2011
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