ZEW/gif Publish First Outlook for Office Real Estate Markets – Mostly Negative Trend

For the five largest office real estate markets in Germany, namely Berlin, Hamburg, Frankfurt, Düsseldorf and Munich, decreasing returns are expected until the end of 2011. The top rents will slightly decrease by the end of 2010, and the market is expected to stabilize by 2011. The alarming vacancy rate in Frankfurt is expected to increase further, whereas the increase of vacancies in Berlin will be the lowest by the end of next year. These are the findings of a survey conducted by gif Arbeitsgruppe Marktanalysen und Bedarfsprognosen (gif market analysis and demand forecasting working group) in cooperation with the Centre for European Economic Research (ZEW) Mannheim in August 2010.

The survey analysed the future development on the five largest German office real estate markets. 18 German institutions were invited to participate in this survey, which was conducted for the first time. In the end, 16 of them participated in the survey. Some of these institutions have not yet published their outlooks. The areas of expertise range from consultants/estate agents, to investors, real estate owners and research companies.

The survey’s initiators, Jaroslaw Morawski and Ullrich Werling, are happy with the participation: "In Germany, there are around 18 institutions which make methodically sound outlooks for office real estate markets, 16 of them participating in our survey. This is a great result and it proves that there is a strong interest to make the sector more transparent and professional."

The survey aims at summarising the individual quantitative outlooks of all participants and making them available to the market, thus contributing to increasing the transparency of real estate markets. In contrast to the existing survey of sentiment and expectations, the ZEW/gif survey used for the first time exact outlook data of the most important actors on the German market. These data refer to the significant parameters "vacancy rate", "top rents" and "top returns". The outlooks refer to the period until the end of 2011.

To guarantee a professional methodological implementation and neutrality, the data were evaluated by ZEW. Felix Schindler, ZEW researcher, comments on the results: "Despite a considerable distribution of answers, there is a basic tendency: The trend is still not very positive."

"In the future, the survey is to be repeated every six months," says Thomas Beyerle, head of gif working group. In the next round of survey, the outlooks are to be compared to the actual developments.

For further information please contact

Prof. Dr. Felix Schindler, Phone: +49 (0)621/1235-376, E-mail: schindler@zew.de