Reports on the increasing shortage of office space in major German cities are cumulating: According to the lastest edition of „Wirtschaftswoche“, the deficiencies of commercial real estate are threatening economic growth in Germany. Similar accounts underlining the dramatic developments have been published in regional papers from Düsseldorf („Rheinische Post“) or Stuttgart („Stuttgarter Nachrichten“) as well as in trade journals such as „Immobilienzeitung“ or syndicated news platforms like „Business Insider“.
„Naturally, we are aware of the problems since we are monitoring the market constantly,“ explains Dr André Helf, CEO of COLLECTION Group, „with our COLLECTION Business Centers we are offering our clients an option to alleviate constant market pressures and dodge the bullet of skyrocketing rents. At our business centers, clients pay rates that are completely flexible, only depending on the amount of space and time needed.“
Statistics drawn from the ZIA's Spring 2018 expertise underscore the extent of the crisis: Commercial real estate vacancy rates in Berlin, Munich, Stuttgart and Düsseldorf range between 1.9 and 2.6 per cent, practically equivalent to full occupancy. Cologne's vacancy rate of 4.0 percent and Hamburg's 4.4 percent are close to statistical full occupancy.
„A few years ago, landlords were known to offer incentives to commercial renters, such as moving cost take-overs or initial free rental months. Those days are long over,“ observes Dr Helf, „in many cities, landlords even withdraw extension options from lease agreements. Typically, many contracts expire after five years, with options to extend leases for five more years. Not anymore. We have seen entire companies literally stranded on the street. Of course, those kinds of things don't happen at our business centers and we are more than happy to accommodate customers in need of office space.“
Commercial and corporate associations are warning of dire economic consequences if growth prospects are diminished by real estate shortages. The situation is especially dramatic in cities like Stuttgart and Düsseldorf, with large business sectors of medium-sized companies.
„What we see today is the result of restructuring many former commercial real estate in residential buildings, since investors wanted to take advantage of the steep rise in residential rents. Those spaces were withdrawn from the commercial market. Municipalities and political decision makers need to find a way to create a better mix in order to release tensions on both residential and commercial real estate markets,“ says Dr Helf.
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