Industry and IT sector dominate market events
Several large-volume contracts have ensured a dynamic start to the year on the Munich office market. The letting volume in the first three months of this year totalled 164,900 m². The result from the same quarter of the previous year and the five-year average were thus exceeded by 17 per cent each, and the ten-year average (176,250 m²) was only narrowly missed.
The positive development is due to the increase in medium-sized deals of up to 5,000 m² and several lettings above 10,000 m². Two deals exceeded the 20,000 m² mark: The software company JetBrains has signed a lease agreement for 21,5000 m² in the Eisbachviertel in Tucherpark and E.ON has secured 21,300 m² “An den Brücken 2” at Landsberger Straße 84-90.
“The rental result was driven by several major deals. This shows that Munich is in demand as an office location and is also attracting interest nationwide,” emphasizes Fritz Maier-Hartmann, Senior Team Leader Office Leasing and Branch Manager JLL Munich. Companies are willing to move from peripheral to more central locations and pay higher rents for their new offices. The prime rent is currently 60 euros/m². “In the recent past, rents have also been registered significantly higher in some deals. We therefore expect a further increase in prime rents to 62 euros/m² by the end of this year.”
The industrial sector in particular is currently responsible for high take-up in Munich. In the first quarter, this industry accounted for almost half of total sales. IT companies contributed about a quarter to the rental result. The most sought-after sub-markets in the Bavarian capital are the city centre with a share of 25 per cent, the Westend (15 per cent) and the south (twelve per cent).
Maier-Hartmann expects the positive development to continue in the further course of the year. For example, there are other large-scale searches from 10,000 m² on the market. However, the current geopolitical and economic developments would lead to a certain slowdown in decision-making processes. Maier-Hartmann is therefore lowering its take-up forecast from 680,000 m² at the beginning of this year to 640,000 m².
The vacancy rate is expected to grow from the current 8.9 per cent to 9.2 per cent by the end of 2026 and completions for the year as a whole are expected to amount to around 186,000 m² (previous year: 296,000 m²).
