Not only Hamburg is attractive in the North

The Hamburg office property market made a promising start to 2011, with a turnover of more than 100,000 sq m in the first quarter. This means that more office space was let than in the same period a year earlier, and vacancy fell slightly.

The financial and economic crisis has left its mark on the German office markets. Up to mid-2010, vacancy rates in almost all the German office markets were rising, although the trend now appears to have reversed.

As at the end of 2010, rising office take-up was once again being reported in the three largest cities in northern Germany. According to DIP, in 2010 take-up in Hamburg was approx. 485,000 sq m, in Bremen approx. 85,000 sq m and in Hanover approx. 100,000 sq m.

The major north German office markets already have a reputation for strength and solidity. For years, Hanover and Bremen have boasted below-average office vacancy rates (Hanover less than 5% - Bremen actually under 4%). These two cities have also seen hardly any variation in top rents, which for years have ranged between 12 and 14 Euro per sq m per month (in Hamburg approx. 23 Euro per sq m). Average yields are around 6 to 7%, about 1 percentage point higher than in Hamburg. 

Maximilian Isenberg, director of PAMERA Asset Management GmbH, considers that “the decisive factors for a successful investment in these markets are regional market knowledge and local presence. As well as advice on the transaction and acquisition, subsequent proactive asset management is an absolute prerequisite for achieving sustainable rental income".