ZEW/gif Office Market Forecast: Optimism Continues

Until the end of 2013, prime rents in the five largest German office real estate markets Berlin, Düsseldorf, Frankfurt, Hamburg, and Munich will increase while vacancy rates will decrease. These are the findings of a recent survey among real estate market experts conducted on a six-month basis by gif-Arbeitskreis Marktanalysen und Bedarfsprognosen (gif market analysis and demand forecasting working group) in cooperation with the Centre for European Economic Research (ZEW) in Mannheim.

In the latest survey, the city with the best outlook is Berlin. This corresponds with the findings of the September 2011 survey. Until the end of 2013, the real estate market experts expect a 0.5 per cent fall in the vacancy rate to c. 7.5 per cent and a rise of the prime rents of 4 per cent to EUR 22.50 per sqare metre in the German capital.

According to the survey participants, the lowest top return for office properties is made in Munich. Until the end of 2013, it is expected to remain largely unchanged at around 4.75 per cent. For the four remaining locations, by contrast, an end of the decrease in returns and a slight increase in top returns is predicted for the course of 2013.

The majority of the real estate market experts, however, forecasts only slight changes in prime rents and realisable returns for Hamburg, Düsseldorf and Frankfurt. All in all, the expectations reveal a picture of stable markets where property values vary only marginally.

"Overall, it is noticeable that there is widespread agreement among the experts at the beginning of the year", comments Prof. Dr. Felix Schindler from the Centre for European Economic Research (ZEW). "In the previous surveys, the majority of forecasts had already pointed in the same direction. Now the picture has become even clearer."

"Furthermore it is noticeable that the predictions for 2012 were revised downwards compared with the results of the last survey. Apparently, real estate market experts expect that the economic slowdown in Europe, which can be observed since Mid-2011, will not leave the office real estate market entirely unaffected", remarks Dr. Jaroslaw Morawski (RREEF).

For further information please contact

Prof. Dr. Felix Schindler, Phone +49 621/1235-378, E-mail schindler@zew.de