Sustainability and demand: office space on the upswing despite the crisis!

Sustainability and demand: office space on the upswing despite the crisis!

There are contradictory trends emerging in current events on the German commercial real estate market. While demand for office space is increasing, especially in larger cities, the situation in prime locations is rather tense. Sascha Haimovici, managing partner at IMMOcontract, reported that many companies are increasingly looking for spacious office space as the world of work increasingly focuses on the presence of employees. This leads to increased demand for modern, easily accessible offices that also have to meet sustainability criteria, as Haimovici explained. This development is primarily due to the fact that team spirit and exchange among employees are becoming more important for companies.

Contradictory developments in metropolises

In contrast, demand in top locations such as Berlin, Frankfurt and Munich is influenced by other factors. According to an analysis by Immobilienscout24 for Capital, demand for commercial properties in these key locations has fallen by an impressive 25 percent. There are many reasons for this: increased interest rates, an increase in e-commerce and the widespread use of home offices have made the situation for commercial real estate critical. Despite these challenges, prices for certain office spaces in these metropolises rose by 2.7 percent compared to the previous year, while rents in rural areas even increased by 3.5 percent, indicating differentiation in the market.

In addition, it is apparent that while vacant retail space in metropolitan areas is increasing, particularly in retail, demand is growing in rural areas. 24 percent more retail space is available in major cities, which is partly due to people's changing shopping habits. The catering industry, on the other hand, is benefiting from increasing demand in all locations, while demand has recently even fallen, especially in large cities. This area of ​​tension between the level and location of real estate prices illustrates the dynamic development of the market, which is also characterized by innovative concepts. However, experts do not see an acute crisis, but rather a return to normality in the real estate industry, as [Capital] reported.

Regardless of these developments, the market for commercial real estate in Germany remains under constant observation. Some experts emphasize that the market is adaptable and is less at risk of a bubble forming. Instead, one could speak of a change that offers both challenges and opportunities, as also noted by [oe24.at].