The Bonn office market got off to a good start in the first quarter of 2021. In total, 31,262 m² of space was let in the first few months. The main reason for this positive result was a large lease of around 18,600 m².
Despite strong quarterly results, many companies are acting very cautiously due to the coronavirus pandemic and its effects.
The pandemic continues to dampen sales in the Bonn office market, partly due to current developments. Nevertheless, the first quarter of 2021 saw the highest letting result for a first quarter in the last four years. Due to the uncertain situation, many of the companies looking for space have agreed to short-term lease extensions with their current landlords or have postponed their searches as far as possible. However, these requests are expected to become active again in the course of 2021, so that an increased frequency on the office market is to be expected at the present time. Furthermore, a number of large leases for rental space of 4,000 square meters or more are currently active on the market. In most cases, further lease negotiations are already underway and are expected to be concluded in the first half of the year.
By the end of March, a total of 21 lease agreements had been concluded. This is roughly in line with the previous year's level (24 agreements). The same applies to the number of lease agreements concluded for office space of 1,500 square meters or more. As in the previous year, three agreements were concluded in this size category. The largest single lease was in the Bundesviertel submarket. A public-sector tenant secured around 18,600 m² of office space under a lease agreement. With a market share of around 59.6%, this lease was the main factor behind the positive letting result for the first quarter.
Thanks to this large lease, the Bundesviertel district ranks first in the ranking with a leasing performance of approximately 20,818 square meters of office space (market share: 66.6 percent). The city center ranks second with a market share of just under 17.7 percent and a letting performance of 5,538 m². The Bad Godesberg submarket ranks third with 3,504 m² of office space let (11.2 percent).
As forecast by Larbig & Mortag at the end of 2020, the average rent at the beginning of the year was EUR 12.92 per square meter, an increase of just over EUR 0.40 per square meter (end of 2020: EUR 12.49 per square meter). The segment below 500 m² continues to be the driving force in terms of the number of rental agreements concluded. Seventeen agreements were concluded in this size category. Only four leases were concluded for office space above 1,000 m². However, prime and maximum rents are declining. At the beginning of 2021, the prime rent was EUR 18.82 per square meter and the maximum rent was EUR 19.45 per square meter. The maximum and prime rents were achieved in Bonn's Nordstadt district and in the Bundesviertel district.
Last year, in 2020, it was already difficult to make an accurate forecast, mainly due to the pandemic. Taking into account the progress of the vaccination program and the growing desire of employees to return to the office from their home offices, demand on the Bonn office market is expected to rise over the course of the year. Many searches are currently on hold, but will have to be reactivated in the course of 2021 due to expiring leases. Furthermore, several larger searches are in the final stages of lease negotiations, which are expected to be finalized in the first half of 2021. The development of the vacancy rate will be interesting to watch, as the Bonn office market continues to lack high-quality space available at short notice.
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