Reports of the growing shortage of commercial premises in major German cities are becoming increasingly frequent: according to the latest issue of *Wirtschaftswoche*, the shortage of office space is even jeopardising Germany’s economic recovery. Similar articles can be found in the local newspapers of major cities particularly affected by this issue, such as the Düsseldorf-based *Rheinische Post* or the *Stuttgarter Nachrichten*. Specialist publications such as the *Immobilienzeitung* and national business news services such as *Business Insider* are also drawing attention to this dramatic development.
“We are, of course, aware of the problems because we naturally monitor the market very closely,” ” explains Dr André Helf, CEO of the COLLECTION Group, “with our COLLECTION Business Centres, we offer our clients a fantastic opportunity to circumvent the increasing scarcity and rising costs in the office space market. With us, they can structure their tenancy terms with complete flexibility at any time, as well as the size of the space required.”
The full extent of the crisis is illustrated by the figures: according to the ZIA’s Spring Report 2018, the vacancy rate in Berlin, Munich, Stuttgart and Düsseldorf ranges between 1.9 and 2.6 per cent – which is practically equivalent to full occupancy. Cologne, at 4.0 per cent, and Hamburg, at 4.4 per cent, are also considered to be almost fully let.
“It used to be common for landlords of commercial property and office space to offer their tenants incentives, such as covering relocation costs or providing a few months’ rent-free tenancy. Those days are long gone,” says Dr Helf, “in many cities, tenants are now even being denied the traditional five-year extension options once the first five years of the lease have passed. We have already seen cases where companies have literally been left out on the street. Of course, nothing like that can happen to them in our business centres. As long as we have capacity, we’re happy to accommodate these clients.”
Business representatives and associations complain that the shortage of office space is increasingly limiting companies’ growth potential when their flexibility regarding space is severely restricted. The situation is particularly acute in cities with a strong SME sector, such as Stuttgart or Düsseldorf.
“We are now seeing the consequences of the fact that, in recent years, numerous office buildings in many cities were converted into residential complexes due to the drastic rise in residential property prices,” explains Dr Helf, “This space has been withdrawn from the commercial market. Local authorities and politicians must ensure a better mix in future.”
###