There continues to be a great deal of movement on the Bonn office market! Following a very positive first half of the year, the Bonn office market continued to see a very high number of lease agreements concluded and space taken up in the third quarter of 2021. In total, the commercial real estate specialists at Larbig & Mortag Immobilien in Bonn recorded around 38,000 square meters of new office space let in the third quarter of 2021.
Public-sector users remain the main drivers of turnover in the office market. However, companies from the free market economy are now also becoming significantly more active in their search for suitable locations.
The positive market trend already evident in the first half of 2021 is also continuing in the third quarter of the current year. Overall, a total rental performance of around 114,000 m² of office space was recorded. This figure is already around 18,000 m² above the total result for 2020 (95,895 m²), and the forecasts for the year-end result are very positive
A total of 64 rental agreements were concluded in the last nine months. Of these, 17 were finalized in the third quarter of 2021. In terms of the third quarter, the science/education sector is the strongest, primarily due to the two major deals with the University of Bonn (third quarter: around 31,000 square meters of office space). In the current year, a total of approximately 32,650 m² of office space has been agreed under lease agreements within this sector. However, the Bonn office market will continue to be dominated by public administration over the course of the three quarters. The rental performance of around 60,023 m² already determined at the end of the first half of the year remains unchanged. Assuming that the University of Bonn is also considered a public institution, a good 91,000 m² of office space was leased by public users. This corresponds to a share of just under 80.0 percent. A healthy risk distribution looks different
Two leases over 5,000 m²:
The largest single lease in the third quarter was secured by the University of Bonn for around 22,000 square meters of office space at Rabinstraße 8 in the center of Bonn. The second largest lease, with around 9,000 m² of rental space brokered in the southern part of the city, was also concluded by the University of Bonn. So far this year, a total of nine lease agreements for over 5,000 m² have been concluded. The continued high level of activity in the small segment of up to 1,000 m² of office space is also encouraging. A total of 14 lease agreements (approx. 5,100 m²) were concluded in the past three months
City center most sought-after submarket:
Thanks to the two leases signed by the university, the city center is back in first place in the ranking, in its traditional interplay with the federal district, with a total rental performance of approximately 60,400 m², corresponding to a 53.91 percent share of the total market. In Bonn's federal district, approximately 36,636 m² (market share: 32.70 percent) of office space was leased by the end of the third quarter.
Average rent declines again – highest and prime rents unchanged:
During the third quarter, the average rent fell by around EUR 0.10/m² to approximately EUR 13.00/m² (first half of 2021: EUR 13.10/m²). The main reason for this is that half of all rental agreements concluded in the third quarter were below the average rent. However, average rents are expected to rise in the course of the fourth quarter, as many of the ongoing rental negotiations are being conducted at rents that are in some cases significantly above the average rent. The highest rent on the Bonn office market remains at EUR 24.00/sqm, resulting from a lease signed in the second quarter of 2021. The prime rent at the end of the third quarter was around EUR 21.03/sqm and also remained unchanged
The vacancy rate is and remains critical:
The vacancy rate at the end of the third quarter of 2021 was around 2.20 percent. This corresponds to an area of approximately 88,253 square meters. The vacancy rate therefore remains extremely critical and far from healthy market conditions. It should also be noted that the two leases signed by the University of Bonn, totaling 31,000 square meters of rental space, did not affect the vacancy rate, as the properties were not included in the vacancy figures in accordance with gif guidelines. In line with the increased demand for high-quality office space with modern building services, the Bonn office market continues to lack adequate office space. Nevertheless, due to many advanced lease negotiations, a further reduction in the vacancy rate is expected for 2021 as a whole.
Forecast for 2021:
The current movement on the Bonn office market allows for a positive forecast for the rest of 2021. At this point in time, the calculated letting performance of around 114,000 m² of office space agreed in rental contracts, is already higher than most of the year-end results for the Bonn office rental market. Furthermore, a number of final lease negotiations are currently underway for various properties, so that further deals are also expected to be concluded in the fourth quarter. Furthermore, following the coronavirus-induced enforced break in the form of working from home, many medium-sized companies are now also looking for office space. These factors mean that a final result of between 120,000 m² and 140,000 m² can be expected.
About Larbig & Mortag Immobilien:
Larbig & Mortag, a partner of the NAI apollo group, was founded in 2008 by Markus Larbig and Uwe Mortag as an independent commercial real estate agency. At the beginning of 2018, the Bonn branch, which had been in existence since 2013, started the 2018 financial year under the leadership of managing director Hendrik Heßlenberg as Larbig & Mortag Immobilien Bonn GmbH. Larbig & Mortag Immobilien currently employs 40 people in the greater Cologne, Bonn, and Leverkusen area. The focus of real estate consulting is on office leasing, commercial investment, and retail leasing in B locations. The research department also supports these areas with sound figures. This enables the consultants to offer services along the entire value chain of an office property. From market analysis and property valuation to marketing concepts for existing buildings and new construction projects (rental and sale). The owner services department rounds off the range of services. For 12 years, customers have relied on Larbig & Mortag's market penetration, innovative and targeted advice, and personal and sustainable support. As a local and independent market player, Larbig & Mortag is one of the leading office property consultants in the greater Cologne, Bonn, and Leverkusen area. Mortag Immobilien is one of the leading commercial real estate consultants in the greater Cologne, Bonn, and Leverkusen area. Through its national and international cooperation with the NAI apollo group network, Larbig & Mortag is integrated as a regional specialist into a network with several German, European, and global locations.
