City Spotlight: Berlin

The Berlin office market is growing rapidly. The lively communities, quality of life, large talent pools and investment opportunities, have made the city one of the world’s hottest office markets.

The city is particularly popular with start-ups and entrepreneurs, Savills reported that 28.5% of the 130 start-ups registered every month in the country in 2018 were in Berlin. In addition, the number of large corporates relocating or opening additional offices in the city is increasing rapidly, with Sony and Amazon both opening offices earlier this year.

The rise of businesses opening offices in Berlin has resulted in record-low vacancy rates. CBRE reported that at the end of Q3 2019, vacancy volumes fell by 38% (YoY) to 274,600 sqm. Vacancy rates are now averaging 1.5% – reaching below 1% in five of 12 submarkets!

In Q3 alone, office take-up totalled 319,600 sqm, the strongest quarter on record for the city. Two lettings of note include:

• SAP leased around 30,000 sqm in the QH Track office building element of Quartier Heidestrasse in the Berlin Europacity.
• The Institute for Federal Real Estate (Bundesanstalt für Immobilienaufgaben – BImA) secured 30,000 sqm in B:HUB in the Outside East submarket.

The city has experienced a steep rise in rent due to the shortage of vacant space, but developers are responding quickly with around 1.5million sqm currently under construction.

• Spreeturm is a new 20-floor office tower in the Ostbahnhofrailway station area. When completed, it will deliver circa 13,000 sqm of lettable office space.
• STREAM office is a 90-meter development located near the Mercedes-Benz Arena in the Mediaspree quarter – one of the most sought after commercial locations for technology, media and communication sectors. Upon completion, the building will deliver 50,000 sqm of space.
• Spandauer Ufer will deliver 18,258 sqm of office space, along with residential, commercial, hotel, retail and restaurant units. The development is situated directly across from Spandau’s railway station offering fantastic transport and connectivity.

Berlin has become one of Europe’s most dynamic cities. The office market is seeing a steady increase in rents, continued demand for space and the city maintains it’s ‘cool image’ and strong quality of life. The market activity shows strength moving forwards, predicting positive effects on average rents in addition to investment and property values.