Office Market Overview JLL Germany Q3 v3

Research
Office Market Overview

Q3 2022
Office market braces itself against

recessive trends
2
Office market braces itself against recessive trends

Uncertainty is the word on everyone’s lips. It runs like a common thread through all areas of social, political and economic life.
It is expressed through the various sentiment indicators for both private households and companies. Unsurprisingly, they are
all well into negative territory, and some of the current values are even lower than those at the height of the COVID-19
pandemic. Throughout the German economy in particular, sentiment has deteriorated significantly. The ifo Business Climate
Index fell to 84.3 points in September from 88.6 points in August. This is the lowest value since May 2020. The decline is
common to all four economic sectors, i.e. manufacturing, trade, services and construction. Companies assessed their current
business situation as much worse than previously. Almost of more relevance, however, is future expectation: pessimism has
increased significantly for the coming months. All in all, it certainly looks like the German economy is sliding into recession.
The depth and length of the recession will depend primarily on the development of expectations regarding inflation and
energy supplies. This requires clear and unequivocal signs from the political sphere (including monetary policy). Only when
the horizon clears will confidence and the inclination to buy and invest return. However, as the clouds are still hanging
perilously low, it is currently impossible to make a meaningful statement about the duration and depth of a recession. The few
rays of sunshine that are breaking through the cloud cover include two key factors for a favourable office market performance:
the labour market, which remains robust; and corporate balance sheets, which are predominantly positive and indicate that
many companies are relatively healthy going into a possible recession. These aspects are also a reason why the propensity to
hire new staff remains positive amongst service providers. This is an essential advance indicator for the letting markets, which
tend to react to developments in these figures around nine months later.
Demand is robust
In the context of this balancing act between uncertainty and robust fundamentals, the office letting market has held up well
during the third quarter. What’s more, office space take-up in the Big 7 cities over the first nine months of 2022 is just under 2.8
million sqm, an increase of 29% compared to the same period last year. The current crisis certainly looks a little different in this
regard, especially as there has been an increase in take-up in all Big 7 office strongholds. It varies between just under 7% in
Düsseldorf and 200% in Stuttgart. It could be argued that these figures include the first quarter of 2022 which was unaffected
by the crisis, but a comparison of the last two third quarters shows a marginal year-on-year increase of just over 2% this year
compared to 2021.
We are seeing that demand remains strong, especially for premium space. Many occupiers, including larger corporates, are
currently bringing forward planned moves and/or new leases by up to two years because, on the one hand, the market for
new-build space continues to tighten making the possibility of a pre-let increasingly limited, and on the other, there is
increasing pressure to dispose of old space which is no longer contemporary. The majority of companies are looking for high-
specification office space to attract and retain staff. An attractive workplace environment is increasingly a factor of production
in terms of a company’s business performance. According to a recent survey by JLL, 43% of companies plan to accelerate
investment in a sustainable and flexible workplace between now and 2025.
However, these trends also indicate that in view of a decline in new construction activity and to satisfy market demand,
significantly greater sums must be invested in existing stock than in the past. This can pay off, as most companies are still
willing to pay a rental premium for sustainably refurbished and ESG-compliant space. Estimates suggest that by 2030, around
one fifth of the overall German office stock will no longer comply with European ESG regulations, a clear indication that there is
a great need for pro-active countermeasures.
Against the background of a favourable three-quarter performance, we stand by our forecast that full-year take-up in 2022 will
be around 3.5 million sqm, an increase of over 7% compared to 2021. Much will depend on the confidence with which
companies go into the New Year. It is almost ‘normal’ that decision-making processes, including lease negotiations, are now
taking much longer than they did one or two years ago.
! " Prime Rental Index and Take-up

BIG 7
1 of 2
Index 1987=100 ,000 sqm, rolling 12 months

240 4,400
4,000
230 3,600
tend to need
a great react for
to developments in these figures around nine months later.
pro-active countermeasures.
Demand
be around 3.5 millionis
sqm,robust
an increase of over 7% compared to 2021. Much will depend on the confidence with which 3
taking much longer
In the context of thisthan they did
balancing actone or twouncertainty
between years ago. and robust fundamentals, the office letting market has held up well
during the third quarter. What’s more, office space take-up in the Big 7 cities over the first nine months of 2022 is just under 2.8
million sqm, an increase of 29% compared to the same period last year. The current crisis certainly looks a little different in this
!
regard, " Prime
especially as thereRental
has been Index and
an increase Take-up
in take-up in all Big 7 office strongholds. It varies between just under 7% in
BIG 7
Düsseldorf
1 of 2 and 200% in Stuttgart. It could be argued that these figures include the first quarter of 2022 which was unaffected
by the crisis, but a comparison of the last two third quarters shows a marginal year-on-year increase of just over 2% this year
compared to 2021.
Index 1987=100 ,000 sqm, rolling 12 months
240 4,400
We are seeing that demand remains strong, especially for premium space. Many occupiers, including larger corporates, are
4,000
230
currently bringing forward planned moves and/or new leases by up to two years because, on the one hand, the market for3,600
new-build space continues to tighten making the possibility of a pre-let increasingly limited, and on the other, there is 3,200
220
increasing pressure to dispose of old space which is no longer contemporary. The majority of companies are looking for high-
2,800
specification office space to attract and retain staff. An attractive workplace environment is increasingly a factor of production
2,400
210
in terms of a company’s business performance. According to a recent survey by JLL, 43% of companies plan to accelerate 2,000
investment in a sustainable and flexible workplace between now and 2025. 1,600
200
1,200
However, these trends also indicate that in view of a decline in new construction activity and to satisfy market demand,
190 800
significantly greater sums must be invested in existing stock than in the past. This can pay off, as most companies are still
400
willing to pay a rental premium for sustainably refurbished and ESG-compliant space. Estimates suggest that by 2030, around
180 0
one fifth of the overall German office stock will no longer comply with European ESG regulations, a clear indication that there is
17
17
18
18
18
18
19
19
19
19
20
20
20
20
21
21
21
21
22
22
22
a great need for pro-active countermeasures.
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Take-up in ,000 sqm Prime Rent (Index 1987=100)
Status: October 2022; Source: JLL
be around 3.5 million sqm, an increase of over 7% compared to 2021. Much will depend on the confidence with which
Vacancy remains stable, but is expected to rise in the

taking much longer than they did one or two years ago.
case ofCompletions
poor-quality
and Vacancy Rate
space
! " BIG 7
The trend towards stabilised vacancy continued in the past quarter. The vacancy rate averaged 4.8% across all Top 7 cities,
2 of 2
which is slightly higher than three months earlier. Although the absolute vacancy volume increased marginally during the
same period, the stock increased by a similar amount, which explains the consistent overall vacancy rate. A total of around 4.6
,000 sqm %
million
1,600
sqm is available short-term to companies looking for office space in the Big 7 real estate strongholds. However, vacancy
6
rates will continue to rise gradually, particularly for poorer quality office space. Almost 70% of the office space take-up
1,400
comprises top class space. Clearly, space which becomes vacant due to relocation and does not meet the requirements of new
5
tenants will tend to remain vacant. This space can then only be marketed on the basis of significant rental price reductions or
1,200
after comprehensive refurbishment.
4
1,000
JLL expects a further slight increase in the vacancy rate to 4.9% by the end of the year. In view of the rise in construction costs
800 3
and the uncertain scheduling of projects, further development in the vacancy rate will depend more than ever on the extent to
which
600 planned new-build construction or refurbishment projects can actually be carried out this year, or are postponed until
2
next year.
400
1
Vacancy
200 and Quality
0 (Main)
Frankfurt Berlin Hamburg 0
2017 2018 2019 2020 2021 Q1-3 2022
Completions in sqm Vacancy Rate in %

A
B B
A A
Vacancy remains stable, but is expected to rise

B
in the
C
case of poor-quality
C space
Munich Düsseldorf Cologne
C
B during the
which is slightly higher than three months earlier. Although the absolute vacancy volume increased marginally
A
B B
million sqm isAavailable short-term to companies looking for office A
space in the Big 7 real estate strongholds.
Stuttgart However, vacancy
B
comprises top class space. Clearly, space which becomes vacant due to relocation and does not meet the requirements Aof new
Market Berlin Düsseldorf Frankfurt (Main) Hamburg Cologne Munich Stuttgart
190 800
1,600
200 400
1,200
180 0
190 800
4
17
17
18
18
18
18
19
19
19
19
20
20
20
20
21
21
21
21
22
22
22
400
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
180
Take-up in ,000 sqm Prime Rent (Index 1987=100) 0
17
17
18
18
18
18
19
19
19
19
20
20
20
20
21
21
21
21
22
22
22
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Q4
Q1
Q2
Q3
Take-up in ,000 sqm Prime Rent (Index 1987=100)

case of poor-quality space

which is slightlycase
higher thanof
threepoor-quality space
months earlier. Although the absolute vacancy volume increased marginally during the
million sqm is available short-term to companies looking for office space in the Big 7 real estate strongholds. However, vacancy
which is slightly higher than three months earlier. Although the absolute vacancy volume increased marginally during the
million sqm is available short-term to companies looking for office space in the Big 7 real estate strongholds. However, vacancy
tenants
JLL expects a further willincrease
slight tend to remain vacant. rate
in the vacancy This to
space
4.9%can
by then onlyofbe
the end themarketed on the
year. In view basis
of the of in
rise significant rental
construction price reductions or
costs
which planned new-build construction or refurbishment projects can actually be carried out this year, or are postponed until
JLL expects a further slight increase in the vacancy rate to 4.9% by the end of the year. In view of the rise in construction costs
next year.
which planned new-build construction or refurbishment projects can actually be carried out this year, or are postponed until
Vacancy and next
Quality
year.
Frankfurt (Main) Berlin Hamburg
Vacancy and Quality

Frankfurt (Main) Berlin A Hamburg
B B
A A
A
B B B C
A A
C
Düsseldorf Cologne
Munich
B C
C C
B
Munich Düsseldorf A
Cologne
B A B
A Stuttgart C
B
B A A
B A B
A Stuttgart
Market Berlin Düsseldorf Frankfurt (Main) Hamburg Cologne Munich Stuttgart B A

The size of the rectangles refers to the vacancy rate of the respective quality category •
Market Berlin Düsseldorf Frankfurt (Main) Hamburg Cologne Munich Stuttgart
The size of the rectangles refers to the vacancy rate of the respective quality category •
No shutdowns of projects under construction, but

new-build volumes continue to fall for 2023
new-build
have eased somewhatvolumes
and the availability ofcontinue towefall
materials has improved, are still for 2023
From a project developer’s perspective, the market situation has not improved significantly over recent weeks. Although the
supply bottlenecks a long way from a
normalisation of the tense situation. According to the Federal Statistical Office, construction prices rose by another 19% in the
5

new-build volumes continue to fall for 2023
From a project developer’s perspective, the market situation has not improved significantly over recent weeks. Although the
supply bottlenecks have eased somewhat and the availability of materials has improved, we are still a long way from a
normalisation of the tense situation. According to the Federal Statistical Office, construction prices rose by another 19% in the
second quarter, the highest-ever increase in a single quarter. Based on the current rise in producer prices (+48% in September
alone), building costs are also likely to continue to rise, at least until the end of the year. In combination with the significant
interest rate rises, there is now a very challenging market situation for developers. Although costs can be partially offset by a
hike in rents, this is nowhere near enough to achieve a positive margin. Renegotiations and rental escalator clauses are still the
predominant mechanisms by which developers attempt to cushion the cost pressure. These are processes which will only be
reflected in statistics and data in the medium term, because with projects already underway, it would be in no-one’s interest to
not complete construction. For example, in the first nine months of 2022, 1.2 million sqm of new space was completed in the
Big 7 cities, an increase of around 20% compared to the same period in 2021.
A further 669,000 sqm is under construction and due to be completed in the last quarter of the year, so the total completion
volume in 2022 will be around 1.9 million sqm. There have been no particular changes since the previous quarter, which may
be interpreted as a positive signal that there will be no ‘emergency stops’ or further delays to projects already under
construction. At present, around 1.6 million sqm is in the pipeline for 2023, 200,000 sqm less than at the mid-year point, and it
is evident that the volume of new construction will reduce because projects are initially put on hold or postponed. The market
for top-specification space is narrowing visibly. It won’t help matters if a number of larger corporates announce that they are
cutting back on their office requirements because the space that they will vacate is unlikely to be of a quality which other
companies are looking for. The market is thereby becoming more differentiated and this will tend to put further upward
pressure on prime rents.
Prime Rents Development

Repeat
€/sqm/month
44.50 Frankfurt (Main)

44.00 43.50 Munich
42.00
41.00 Berlin
40.00
38.00
36.00
34.00
33.00 Hamburg
32.00
30.00 30.00 Düsseldorf
29.50
Stuttgart
28.00 27.50 Cologne
26.00
24.00
22.00
20.00
18.00
2017 Q3
2017 Q4
2018 Q1
2018 Q2
2018 Q3
2018 Q4
2019 Q1
2019 Q2
2019 Q3
2019 Q4
2020 Q1
2020 Q2
2020 Q3
2020 Q4
2021 Q1
2021 Q2
2021 Q3
2021 Q4
2022 Q1
2022 Q2
2022 Q3
Prime rents continue to rise, partly thanks to rental

adjustment clauses in leases
Rarely before has there been such intensive discussion and argument relating to indexation clauses in leases as there is at
present. This is hardly surprising, as it allows owners to hedge against possible losses in value. We assume that 90% to 95% of
all office leases concluded in recent years contain rental adjustment clauses. Some of these take the form of rental escalations,
but the overwhelming majority are agreements which provide for the adjustment of the rent based on the overall cost-of-living
index (inflation) by way of indexation clauses.
The structure of indexation clauses in leases is highly diverse. With a share of 40%, the most common mechanism involves
increasing the rent annually at the same rate as the percentage rise in the cost-of-living index, i.e. inflation. This type of
24.00
22.00
20.00
18.00 6
2017 Q3
2017 Q4
2018 Q1
2018 Q2
2018 Q3
2018 Q4
2019 Q1
2019 Q2
2019 Q3
2019 Q4
2020 Q1
2020 Q2
2020 Q3
2020 Q4
2021 Q1
2021 Q2
2021 Q3
2021 Q4
2022 Q1
2022 Q2
2022 Q3
Prime rents continue to rise, partly thanks to rental

adjustment clauses in leases
Rarely before has there been such intensive discussion and argument relating to indexation clauses in leases as there is at
present. This is hardly surprising, as it allows owners to hedge against possible losses in value. We assume that 90% to 95% of
all office leases concluded in recent years contain rental adjustment clauses. Some of these take the form of rental escalations,
but the overwhelming majority are agreements which provide for the adjustment of the rent based on the overall cost-of-living
index (inflation) by way of indexation clauses.
The structure of indexation clauses in leases is highly diverse. With a share of 40%, the most common mechanism involves
increasing the rent annually at the same rate as the percentage rise in the cost-of-living index, i.e. inflation. This type of
regulation has tended to become increasingly prevalent, especially in the recent past. However, it has been observed that,
from this year, there has been a partial move away from indexation clauses. For many tenants, the risk of being unable to pay
the rent in future is becoming too great, as there is considerable uncertainty regarding the development of inflation.
Conversely, landlords still need to protect value, so many negotiations, especially in the case of large leases, are concluded
based on rental escalation; the rent will rise based on pre-agreed fixed rental increases. This reduces the risk for tenants and
gives owners security in terms of their own calculations. Whether rents are adjusted by rental escalation or indexation clauses,
both options basically contribute to underlying rental growth.
Comparison of prime rents and vacancy rates

Repeat 2017 Q1
10
2017 Q1
8
7
Vacancy Rate (%)
0
20 25 30 35 40 45 50
Prime Rent (€/sqm/month)
Market Berlin Cologne Düsseldorf Frankfurt (Main) Hamburg Munich Stuttgart

The size of the circles refer to the office space stock of the respective market •
The JLL prime rental price index rose strongly to almost 240 points in the third quarter, an increase of 7% year-on-year. Prime
rents rose in all Big 7 real estate strongholds, in a range between just under 4% in Munich and just under 16% in Stuttgart. By
the end of the year, nominal prime rents in all seven cities are expected to rise by a further 1.9%. By how much, and whether
there will be further increases after that, depends crucially on whether increases in base rents are still affordable for office
occupiers in view of the high service charge burdens. This depends primarily on the company-specific business environment.
However, if Germany slides into recession, negotiations relating to rent adjustments will be much more intensive.
! "
1 of 5
Office Space Take-up incl . owner occupier (sqm) Q1-3 2021 Q1-3 2022 %
Berlin1 548,200 619,500 13
Düsseldorf 2 216,600 230,800 7
Frankfurt/M3 270,800 322,300 19

Comparison
rents rose in all of
Bigprime rentsstrongholds,
7 real estate and vacancy ratesbetween just under 4% in Munich and just under 16% in Stuttgart. By
in a range
Repeat 2017 Q1
10 7
occupiers
9 in view of the high service charge burdens. This depends primarily on the company-specific business environment.
2017 Q1
8
7
! "
Vacancy Rate (%)
6
1 of 5
Office
4 Space Take-up incl . owner occupier (sqm) Q1-3 2021 Q1-3 2022 %
3
Berlin1 548,200 619,500 13
2
Düsseldorf 2 216,600 230,800 7
1
3 270,800 322,300 19
Frankfurt/M
0
20 25 30 35 40 45 50
Hamburg4 Prime Rent (€/sqm/month) 379,600 485,000 28
Market 5Berlin Cologne Düsseldorf Frankfurt (Main) Hamburg Munich Stuttgart

Cologne 229,600 285,300 24
Munich Region6 441,100 601,600 36
7
Stuttgart 83,200 249,900 300
the end of the year, nominal prime rents in all seven cities are expected to rise by
Total a further 1.9%. By 2,794,400
2,169,100 how much, and whether
29
1 City Area; 2 City Area incl. Ratingen, Neuss, Erkrath and Hilden; 3 City Area incl. Eschborn and Kaiserlei; 4 City Area; 5 City Area; 6 City Area incl. surrounding areas; 7 City Area incl. Leinfelden-Echterdingen
occupiers
• in view of the high service charge burdens. This depends primarily on the company-specific business environment.
! "
Offline
2 of 5 version for download
Vacancy incl. Space for subletting Q3 2021 Q3 2022 %
m2 Quote (%) m2 Quote (%)
Berlin1 874,200 4.1 858,700 4.0 -2
Düsseldorf2 714,100 7.7 758,500 8.2 6
Frankfurt/M3 Research:816,900 7.0 1,023,800 8.7 25
ice Leasing Germany Helge Scheunemann, Head of Research Germany

Hamburg4 541,500 3.6 530,000 3.5 -2
Cologne5 252,000 3.2 240,000 3.1 -5

e Investment Germany
Munich Region6 907,100 4.3 873,900 4.1 -4
tions or suggestions regarding the Office Market Overview? Contact us:
Stuttgart7 159,300 1.8 228,100 2.5 43
1 City Area; 2 City Area incl. Ratingen, Neuss, Erkrath and Hilden; 3 City Area incl.Last name
Eschborn and Kaiserlei; 4 City Area; 5 City Area; 6 City Area incl. surrounding areas; 7 City Area incl. Leinfelden-Echterdingen
•
Which region are you interested in? * %
Offline version for download
about new publications around the Office Market via email.
Research:
her with its subsidiaries and affiliates, is a leading global provider of real estate and investment management services. We take our responsibility to protect the
Comparison
rents rose in all of
Bigprime rentsstrongholds,
7 real estate and vacancy ratesbetween just under 4% in Munich and just under 16% in Stuttgart. By
in a range
Repeat 2017 Q1
10
8
occupiers
9 in view of the high service charge burdens. This depends primarily on the company-specific business environment.
2017 Q1
8
7
! "
Vacancy Rate (%)
6
3 of 5
4
Prime Office Rents (€/sqm/Month) Q3 2021 Q3 2022 %
3
Berlin1 38.50 41.00 6.5

2
1
Düsseldorf2 28.50 30.00 5.3
0
Frankfurt/M3 20 25 30 42.50 35 44.5040 45 4.7 50
Prime Rent (€/sqm/month)

Hamburg4 31.00 33.00 6.5
Market Berlin Cologne Düsseldorf Frankfurt (Main) Hamburg Munich Stuttgart
Status: October52022; Source: JLL
Cologne 26.00 27.50 5.8
TheMunich
JLL prime
Region6rental price index rose strongly to almost 240 points in the42.00
third quarter, an increase
43.50 of 7% year-on-year.
3.6 Prime
7
theStuttgart 25.50
end of the year, nominal prime rents in all seven cities are expected to rise by a further 1.9%. By how much, and15.7
29.50 whether
occupiers
• in view of the high service charge burdens. This depends primarily on the company-specific business environment.
! "
Offline
4 of 5 version for download
Completions (in sqm) Q1-3 2021 Q1-3 2022 %
Berlin1 364,300 522,700 44
Düsseldorf2 46,400 58,800 27
Frankfurt/M3 119,200 93,300 -22
Research:
4 87,400 155,500 78
ice Leasing GermanyHamburg Helge Scheunemann, Head of Research Germany
Cologne5 59,400 73,400 24
Munich Region6 174,100 289,400 66

Stuttgart7 190,300 51,800 -73
1 City Area; 2 City Area incl. Ratingen, Neuss, Erkrath and Hilden; 3 City Area incl.Last name
Eschborn and Kaiserlei; 4 City Area; 5 City Area; 6 City Area incl. surrounding areas; 7 City Area incl. Leinfelden-Echterdingen
•
Research:
9
occupiers in view of the high service charge burdens. This depends primarily on the company-specific business environment.
! "
5 of 5
Office Space Stock (in Mill. sqm) Q3 2021 Q3 2022 %
Berlin1 21.10 21.62 2.5
Düsseldorf2 9.23 9.30 0.8
Frankfurt/M3 11.64 11.72 0.7
Hamburg4 15.20 15.36 1.1
Cologne5 7.84 7.86 0.3
Munich Region6 21.10 21.51 1.9
Stuttgart7 9.02 9.10 0.9
•
Research:
Last name
essive trends
10
Berlin
A very good nine months in 2022 in Berlin
A total take-up volume of around 619,500 sqm was

Berlin
recorded in Berlin's office letting market in the first
,000 sqm % or €/sqm/ month
nine months, 13% more than in the year before 1,200 45
(548,200 sqm) and 12% above the ten-year average.
40
There were seven lettings in the >10,000 sqm size 1,000
category (128,300 sqm) and nine deals of units with 35
5,000 - 10,000 sqm (60,400 sqm in total). 800 30

Approximately 70% of the lettings involved units in
25
the < 5,000 sqm size category (430,800 sqm). In terms 600
of price segments, both the highest number of deals 20
(190) and the largest letting take-up volume 400 15

(142,000 sqm) were recorded in the €25.00 -
10
29.99/sqm p.m. price segment. 200
5
Business services were the largest securers of space

0 0
2017 2018 2019 2020 2021 Q3 2022
with 88,400 sqm (107 deals) in the first nine months,
while public administration retained second place Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)

(83,500 sqm and 19 deals). The vacancy rate rose
slightly from 3.9% to 4.0% compared to the previous
quarter and is expected to reach 4.3% by the end of
the year. The main reason for this is the current
economic uncertainty which is evident from the
delays in letting decisions and in the tendency to
secure smaller premises. The Covid-19 pandemic is
no longer playing a major role in these decisions.
The prime rent in Berlin remained at €41.00/sqm

p.m. in the third quarter (compared to €38.50/sqm
p.m. in Q3 2021).

essive trends
11
Dusseldorf
The lowest quarterly take-up in the last ten years
A volume of around 231,000 sqm was taken up in

Düsseldorf
Dusseldorf’s office letting market in the first three
quarters, 7% more than in the same period last year, 600 30
but 24% less than the five-year average. At barely
46,000 sqm, the third quarter recorded the lowest 25
three-month take-up in the last ten years, due
mainly to the absence of any major deals. The 400 20
Düsseldorf city area accounted for 209,000 sqm,
including the largest deal in the third quarter in 15
which Air Liquide leased around 4,400 sqm in ‘The
Oval’, which was completed in 2021 in the 200 10
Kennedydamm submarket. The highest demand
came from business services, who accounted for 5
26% of the space and 21% of the leases signed. In
order to offer employees an attractive working 0 0
2017 2018 2019 2020 2021 Q3 2022
environment, premium-quality units are in
Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)
particularly high demand, with 63% of take-up
Source: Status: October 2022; Source: JLL
attributable to this category. The vacancy rate
remained stable at 8.2% in the third quarter. A total
of approximately 760,000 sqm is available in the
short term, of which 561,000 sqm is in the Düsseldorf
city area. In popular locations such as the CBD,
however, the supply of premium units still falls short
of demand. After a significant increase in the second
quarter, the prime rent remained stable in the third
quarter at €30.00/sqm p.m. The fact that rents are
rising across the board can be seen from the
increased weighted average rent which reached a
new high of €18.06/sqm p.m.

essive trends
12
Frankfurt
Very good result for the Frankfurt office letting
market in the first nine months
A take-up volume of around 322,300 sqm of office Frankfurt

space was achieved in the Frankfurt office letting
market in the first three quarters. This is 13% more 800 45
than a year ago, but is still 8% less than the five-year
40
average. The number of deals is also higher (422
compared to 393), reflecting an increased average 600
35
deal size (763 sqm compared to 689 sqm). Large 30

deals (starting from 5,000 sqm) now make up 29% of
25
the total volume, compared to 27% a year ago. The 400
current results appear to confirm the original 20
forecast of 470,000 sqm. 15
200
10
The highest demand in the first nine months came
from the banking and finance sector, which was 5
responsible for 22% of the take-up. Business services

0 0
2017 2018 2019 2020 2021 Q3 2022
followed in second place with 22%. The most
popular submarket in the first nine months was Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)

Eschborn, which accounted for almost one in every
five square metres let. New construction volume was
significantly less in the first three quarters of 2022
than in the equivalent period of 2022 (93,300 sqm
compared to 112,900 sqm). The most important
reasons for this are the material shortages along with
rising building costs. In terms of the market as a
whole, the vacancy rate rose further from 8.5% to
8.7%. Rising rents have been observed in 9 out of the
16 submarkets in recent months, and the prime rent
has also risen again by €1.00 to €44.50/sqm p.m. The
prime rent will continue to rise over the next few
years if demand for high-quality office space remains
strong.

essive trends
13
Hamburg
Best result in the last ten years
Almost 485,000 sqm of office space was taken up in

Hamburg
the Hamburg market area in the first three quarters
of 2022. This is an increase of 27% compared to the 800 35
ten-year average of the respective comparative
quarters. Three major leases are largely responsible 30
for this result: the deals concluded by Dataport 600

25
AdöR, Haspa and VTG AG alone make up around 17%
of the total volume. Around a quarter of the take-up
20
can be attributed to the City Centre submarket, a 400
further 15% to HafenCity and to City Süd (Outer 15
Zone) and Altona-Ottensen-Bahrenfeld, each with

just under 11%. Due to the high number of deals, the 200
10
sectoral distribution is evident irrespective of major

5
deals: manufacturing accounts for 15%, and IT and
business services account for 14% of the take-up. We 0 0
2017 2018 2019 2020 2021 Q3 2022
expect a take-up of 600,000 sqm for the full year,
which would be above the ten-year average by 18%.
Top-quality fit-out specifications, modern
workspaces and new use concepts continue to be the
focus when it comes to choosing space. Prominent
development projects in central locations such as
BURSTAH and the Überseequartier will be fully let by
the time they are completed. The vacancy rate
currently stands at 3.5%. Potential tenants have over
530,000 sqm of existing space available to them in
the short term, and another almost 161,000 sqm of
new building space is under construction. The prime
rent is currently €33.00/sqm p.m., €2.00 higher than
in the same quarter last year. During the same
period, the weighted average rent rose by €3.76, or
almost 22%, to its current level of €21.14/sqm p.m.

essive trends
14
Cologne
Increased take-up and a further increase in prime
rents
In the first nine months, Cologne’s office letting Cologne

market recorded the best result in the last five years
with a take up of around 285,000 sqm. In a year-on- 400 30
year comparison, the increase is 24%, and the five-
year average was exceeded by 34%. The total volume 25
was significantly influenced by five lettings between
5,000 - 45,000 sqm, which were already recorded in 20
the first half of the year. With just around 56,000 sqm,
the third quarter is well behind the first two quarters 200 15
(Q1: 79,000 sqm; Q2: 151,000 sqm). Companies are
primarily interested in high-quality space, which is 10
rarely found in existing buildings in Cologne. As a
result, around a third of take-up was secured in 5
development projects. The majority of units were
taken up by the public administration sector (35%). 0 0
2017 2018 2019 2020 2021 Q3 2022
While business services signed the most leases
(22%), they made up just 10% of total take-up. The
vacancy rate has fallen slightly in recent months and
is at a low level of 3.1%. Of the 240,000 sqm that can
be occupied in the short term, over 80% is of average
or outdated quality. The high demand for premium-
quality space and the continuing shortages in this
segment again led to an increase in prime rents. It
reached €27.50/sqm p.m. at the end of September
and a further increase is expected towards the end of
the year.

all well into negative territory, and some of the current values are even lower than those at the height of the COVID-19
pandemic. Throughout the German economy in particular, sentiment has deteriorated significantly. The ifo Business Climate
essive trends
Berlin Munich 15
Munich
Dusseldorf Munich continues to record very good take-up
Munich continues to record very good take-up figures in the third quarter
Frankfurt
figures in the third quarter A take-up volume of 601,600 sqm was recorded in
Munich
Munich’s office letting market in the first nine
Munich
A take-up volume of 601,600 sqm was recorded in
Munich
Hamburg
Munich’s office letting market in the first nine months, an increase of 36% compared to the
,000 sqm
1,200
months, an increasetoofrecord
36% compared corresponding period last year. Compared
,000 sqm % or €/sqm/to the ten-
month
Munich continues very goodtotake-up
the 1,200 45
Cologne
corresponding
figures period
in the third last year. Compared to the ten-
quarter
year average of the respective comparative quarters, 1,000
40
year average of the respective comparative quarters, take-up in the first three quarters is 13% higher and
1,000
A take-up volume of 601,600 sqm was recorded in in terms of the current year, the third quarter even
Munich
Munich
take-up in the first three quarters is 13% higher and
Munich’s office letting market in the first nine
35
slightly exceeds the previous two, at 205,000 sqm.

800
in terms of the current year, the third quarter even ,000

800sqm % or €/sqm/ month
30
months, an increase of 36% compared to the 1,200 Many smaller and medium-sized deals in particular
slightly exceeds the previous two, at 205,000 sqm. 45 600
Stuttgart
corresponding period last year. Compared to the ten-
Many smaller and medium-sized deals in particular 600
contributed to this very good quarterly result, 25
adding
40
year average of the respective comparative quarters, to the largest deal of the year, the lease by Personio
contributed to this very good quarterly result, adding 1,000 20 400
take-up in the first three quarters is 13% higher and GmbH of 37,700 sqm. IT companies accounted35for
to the largest deal of the year, the lease by Personio 400 15
in terms of the current year, the third quarter even the largest share of take-up, at 31%, followed by
GmbH of 37,700 sqm. IT companies accounted for 800 30 200
slightly exceeds the previous two, at 205,000 sqm. business services with 15%. 10
the largest share of take-up, at 31%, followed by 200 25
Many smaller and medium-sized deals in particular
business services with 15%. 600 5 0
2017 2018 2019 20
contributed to this very good quarterly result, adding High-quality and centrally located space remains
20
0 0
to the largestand
High-quality dealcentrally
of the year, the lease
located spaceby Personio
remains 400 particularly
2017 2018popular,
2019 with the best-quality
2020 2021 space
Q3 2022
15
Take-up cumulated (LHS) Prime rent (R

GmbH
particularly popular, with the best-quality spacefor
of 37,700 sqm. IT companies accounted accounting
Take-up for 79%
cumulated (LHS) ofrent
Prime take-up
(RHS) in the third
Vacancy quarter. In
rate (RHS)
10
the largest share
accounting of take-up,
for 79% at in
of take-up 31%,
thefollowed by In
third quarter. terms of submarkets, the City Centre recorded the
200
business
terms services withthe
of submarkets, 15%.
City Centre recorded the highest concentration of take-up with 30%, followed
5
highest concentration of take-up with 30%, followed 0 by the East, Periphery North and Periphery East,
0
2017 2018 2019 2020 2021 Q3 2022
High-quality and centrally located space remains each with 10%.
by the East, Periphery North and Periphery East,
particularly popular, with the best-quality space Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)
each with 10%.
accounting for 79% of take-up in the third quarter. In 873,900 sqm of existing space is available for short-
terms ofsqm
873,900 submarkets, thespace
of existing City Centre recorded
is available the
for short- term letting, which corresponds to a vacancy rate of
highest concentration of take-up with 30%, followed
term letting, which corresponds to a vacancy rate of 4.1%. Furthermore, around 1.1 million sqm is
by theFurthermore,
4.1%. East, Periphery North1.1
around and Periphery
million sqm East,
is currently under construction.
each with 10%.
currently under construction.
The high demand for location and quality, and the
873,900
The highsqm of existing
demand space and
for location is available
quality,for
andshort-
the willingness to pay for it are also reflected in the
term letting, which corresponds to a vacancy rate of
willingness to pay for it are also reflected in the prime rent, which rose to €43.50/sqm p.m. in the
4.1%. Furthermore,
prime around
rent, which rose 1.1 millionp.m.
to €43.50/sqm sqmin
is the third quarter, and in the weighted average rent,
currently
third under
quarter, construction.
and in the weighted average rent, which rose to €24.49/sqm p.m
which rose to €24.49/sqm p.m
The high demand for location and quality, and the
willingness to pay for it are also reflected in the
prime rent, which rose to €43.50/sqm p.m. in the
third quarter, and in the weighted average rent,
which rose to €24.49/sqm p.m
Office market braces itself against recessive

Uncertainty is the word on everyone’s lips. It runs like a common thread through all areas of social, politica
It is expressed
Uncertainty is the word on everyone’s lips. It runs like a common through
thread through allthe various
areas sentiment
of social, indicators
political for both
and economic private households and companies. Unsur
life.
It is expressed through the various sentiment indicators for both private households and companies. Unsurprisingly, they are even lower than those at the height of th
all well into negative territory, and some of the current values are
essive trends
16
Stuttgart
Stuttgart is heading towards a good annual result
249,900 sqm of office space was taken-up in Stuttgart

Stuttgart
in the first three quarters, 203% more than in the
same period last year and 39% above the ten-year 400 30
average for the corresponding comparative quarters.
With just 33,500 sqm, the third quarter falls 25
significantly behind the first two very strong quarters
in which several large deals were concluded. 20
Nevertheless, it corresponds to the level of the
comparative quarter last year. There were no major 200 15
deals recorded in the past quarter, which is reflected
in the average deal size of 665 sqm, compared to 10
2,102 sqm in the second quarter. A take-up of
320,000 sqm is expected by the end of the year, 5
which is an increase of 29% compared to the ten-
year average. 0 0
2017 2018 2019 2020 2021 Q3 2022
In Stuttgart, there was a continued high level of Take-up cumulated (LHS) Prime rent (RHS) Vacancy rate (RHS)
Source: Status: July 2022; Source: JLL

demand in the city locations observed, while
peripheral office locations are in much less demand.
This is also reflected in an anticipated further
increase in the prime rent which, at €29.50/sqm p.m.
in the third quarter, is around 16% higher than in the
same quarter of last year. However, peripheral
locations with low-quality buildings could face
structural vacancies in some places.
The overall vacancy rate of 2.5% remains low and

some shifts in the originally planned completion
pipeline for the second half of the 2020s mean that
the situation for potential tenants is tense and there
is currently little choice of space in central locations.

Hamburg4 379,600 485,000 28
Our Office Market contacts:
5 229,600 285,300 24
Cologne
Office Leasing: Research:
Stephan Leimbach, Head of Office Leasing GermanyMunich Region6 Helge Scheunemann, Head of Research
441,100 Germany 601,600 36
17
Office Investment: Offline7 version for download
Stuttgart 83,200 249,900 300
Marcus Lütgering, Head of Office Investment Germany

Total 2,169,100 2,794,400 29
Do you have any questions or suggestions regarding

1 City Area; 2 City Area incl. Ratingen, Neuss,the Office
Erkrath and Market
Hilden; 3 City Overview?
Area incl. Eschborn Contact
and Kaiserlei; 4 City Area; us:
5 City Area; 6 City Area incl. surrounding areas; 7 City Area incl. Leinfelden-Echterdingen
•
First name Last name

Contact us
Email * Which region are you interested in? * %
Our Office Market contacts: Offline version for download
Your message
Office *
Leasing: Research:
Stephan Leimbach, Head of Office Leasing Germany Helge Scheunemann, Head of Research Germany
Office Investment:
I wouldHead
Jan Eckert, like toofstay informed
Capital about
Markets new publications
DACH around the
& Office Investment Office Market via email.
Germany
Contact us
Do you have any questions or suggestions regarding the Office Market Overview? Contact us:
Our Office Market contacts:
Submit
First Name Last Name *
Office Leasing: Research:
*Stephan Leimbach,
mandatory field Head of Office Leasing Germany Helge Scheunemann, Head of Research Germany
Email * Job title
Office Investment:
Privacy Notice
Marcus Lütgering, Head of Office Investment Germany
Which region are you interested in? %
Jones Lang LaSalle (JLL), together with its subsidiaries and affiliates, is a leading global provider of real estate and investment management services. We take our responsibility to protect the
Do you have any questions or suggestions regarding the Office Market Overview? Contact us:
personal
Your information
message * provided to us seriously.
First name Last name

Generally the personal information we collect from you are for the purposes of dealing with your enquiry.
We endeavor
Email * to keep your personal information secure with appropriate level of security and keepWhich
for asregion
long as
arewe
youneed it for legitimate
interested in? * business or legal reasons. We will then delete it safely
%
I would like to stay informed about new publications around the Office Market via email.
and securely. For more information about how JLL processes your personal data, please view our privacy statement.
Your message *
Submit
*JLL
mandatory
(NYSE: fields
I wouldJLL)
likeis
toastay
leading professional
informed about newservices firm that
publications specializes
around the Officein real estate
Market and investment management. JLL shapes the future of real estate for a better world by using the most
via email.
advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company
with annual
Privacy revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 98,000 as of December 31, 2021. JLL is the brand name, and a registered trademark, of
Notice
Jones Lang LaSalle Incorporated. For further information, visit jll.com.
Submit(JLL), together with its subsidiaries and affiliates, is a leading global provider of real estate and investment management services. We take our responsibility to protect the
Jones Lang LaSalle
personal information provided to us seriously.
*Copyright
mandatory© JONES
field LANG LASALLE SE, 2022.
No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. It is based on material that we believe to be
Privacy Notice
reliable. Whilst every effort has been made to ensure its accuracy, we cannot offer any warranty.
We endeavor to keep your personal information secure with appropriate level of security and keep for as long as we need it for legitimate business or legal reasons. We will then delete it safely
Jones Lang LaSalle
and securely. (JLL),
For more together with
information itshow
about subsidiaries and affiliates,
JLL processes is a leading
your personal data,global
pleaseprovider
view ourofprivacy
real estate and investment management services. We take our responsibility to protect the
statement.
personal information provided to us seriously.
Contact us
We endeavor
JLL toiskeep
(NYSE: JLL) your personal
a leading information
professional servicessecure with
firm that appropriate
specializes level
in real of security
estate and keep for
and investment as long as we
management. need
JLL it forthe
shapes legitimate
future ofbusiness or for
real estate legal reasons.
a better We willusing
world then the
delete it safely
JLL Logo Find & lease space About JLL Followby
us most
and securely. For moretoinformation about opportunities,
how JLL processes Transform
your withdata,
personal technology
please view privacy statement. Legal Notice
advanced technology create rewarding amazing spaces and sustainable real our
estate solutions for our clients, our people and our communities. JLL is a Fortune 500 company
Manage property & portfolio Industries Careers Investor relations ! " # $ !
with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 102,000 as of June 30, 2022. JLL is the brand name, and a registered trademark, of
Deliver projects Research & Trends Newsroom Contact Us
Invest in real estate Sustainability
Copyright
JLL (NYSE:©JLL)
JONES LANG LASALLE
is a leading SE, 2022.
professional services firm that specializes in real estate and investment management. JLL shapes the future of real estate for a better world by using the most
advanced technology to create rewarding opportunities, amazing spaces and sustainable real estate solutions for our clients, our people and our communities. JLL is a 2022
Copyright Fortune 500Lang
Jones company
LaSalle IP, Inc.
PrivacyNostatement
part of this Privacy commitment
publication Cookie Statement
may be reproduced Terms
or transmitted of service
in any form or bySite
anymap
meansLegal Notice
without prior written consent of Jones Lang LaSalle. It is based on material that we believe to be
with annual revenue of $19.4 billion, operations in over 80 countries and a global workforce of more than 98,000 as of December 31, 2021. JLL is the brand name, and a registered trademark, of
Copyright © JONES LANG LASALLE SE, 2022.

Contact us
No part of this publication may be reproduced or transmitted in any form or by any means without prior written consent of Jones Lang LaSalle. It is based on material that we believe to be
JLL Logo Find & lease space About JLL Follow us
Transform with technology Legal Notice
Manage property & portfolio Industries Careers Investor relations ! " # $ !
Deliver projects
Invest in real estate
Research & Trends Contact us
Newsroom
Sustainability
Contact Us
JLL Logo Find & lease space About JLL Follow us

Transform with technology Legal Notice
Privacy statement Privacy commitment
Manage property &Cookie Statement
portfolio Terms of service Site map Legal NoticeCareers Copyright 2022 Jones Lang!LaSalle IP, Inc.
Industries Investor relations ! " # $
Deliver projects Newsroom
Contact us
Research & Trends Contact Us
Invest in real estate Sustainability
Privacy statement Privacy commitment Cookie Statement Terms of service Site map Legal Notice Copyright 2022 Jones Lang LaSalle IP, Inc.

Office Market Overview JLL Germany Q3 v3

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Office Market Overview JLL Germany Q3 v3

Uploaded by

Copyright:

Available Formats

Research

Office Market Overview

Office market braces itself against

Office market braces itself against recessive trends

! " Prime Rental Index and Take-up

Index 1987=100 ,000 sqm, rolling 12 months

Vacancy remains stable, but is expected to rise in the

Completions in sqm Vacancy Rate in %

Status: October 2022; Source: JLL

Vacancy remains stable, but is expected to rise

Vacancy remains stable, but is expected to rise in the

case of poor-quality space

Vacancy and Quality

Market Berlin Düsseldorf Frankfurt (Main) Hamburg Cologne Munich Stuttgart B A

Market Berlin Düsseldorf Frankfurt (Main) Hamburg Cologne Munich Stuttgart

No shutdowns of projects under construction, but

No shutdowns of projects under construction, but

Prime Rents Development

44.50 Frankfurt (Main)

Status: October 2022; Source: JLL

Prime rents continue to rise, partly thanks to rental

Prime rents continue to rise, partly thanks to rental

Comparison of prime rents and vacancy rates

Prime Rent (€/sqm/month)

Market Berlin Cologne Düsseldorf Frankfurt (Main) Hamburg Munich Stuttgart

Berlin1 548,200 619,500 13

Düsseldorf 2 216,600 230,800 7

Frankfurt/M3 270,800 322,300 19

Hamburg4 Prime Rent (€/sqm/month) 379,600 485,000 28

Market 5Berlin Cologne Düsseldorf Frankfurt (Main) Hamburg Munich Stuttgart

Vacancy incl. Space for subletting Q3 2021 Q3 2022 %

m2 Quote (%) m2 Quote (%)

Berlin1 874,200 4.1 858,700 4.0 -2

Düsseldorf2 714,100 7.7 758,500 8.2 6

Frankfurt/M3 Research:816,900 7.0 1,023,800 8.7 25

ice Leasing Germany Helge Scheunemann, Head of Research Germany

Cologne5 252,000 3.2 240,000 3.1 -5

Which region are you interested in? * %

Offline version for download

about new publications around the Office Market via email.

Berlin1 38.50 41.00 6.5

Prime Rent (€/sqm/month)

Completions (in sqm) Q1-3 2021 Q1-3 2022 %

Berlin1 364,300 522,700 44

Düsseldorf2 46,400 58,800 27

Frankfurt/M3 119,200 93,300 -22

Cologne5 59,400 73,400 24

tions or suggestions regarding the Office Market Overview? Contact us:

Which region are you interested in? * %

Offline version for download

about new publications around the Office Market via email.

Office Space Stock (in Mill. sqm) Q3 2021 Q3 2022 %

Berlin1 21.10 21.62 2.5

Düsseldorf2 9.23 9.30 0.8

Frankfurt/M3 11.64 11.72 0.7

Hamburg4 15.20 15.36 1.1

Cologne5 7.84 7.86 0.3

Munich Region6 21.10 21.51 1.9

Stuttgart7 9.02 9.10 0.9

Offline version for download

tions or suggestions regarding the Office Market Overview? Contact us:

Which region are you interested in? * %

about new publications around the Office Market via email.

A total take-up volume of around 619,500 sqm was