152.000 m² of rental space in the first three quarters of 2020. Office space turnover remains around 30 percent below the previous year's figure. The trend of the first half of the year is continuing in the third quarter due to the ongoing uncertainty and unpredictability of the overall situation.
In the first and second quarters, space take-up on the Cologne office market was already around 30 percent below the previous year's figure. This trend continued in the third quarter, with space take-up of approximately 152,000 square meters, around 62,000 square meters below the previous year's result (third quarter 2019: 214,000 square meters). However, it is positive that the third quarter saw the highest letting performance of the year to date at around 60,000 square meters, compared with the previous two quarters. The first two quarters were particularly affected by the lockdown. Fortunately, demand picked up again in the previous quarter, which is having a correspondingly positive effect on the office market.
A large lease of approximately 10,000 square meters to the Cologne Main Customs Office in a new construction project in Cologne-Ehrenfeld shows that large lease agreements are still being concluded even in the current market phase. The largest deal so far this year remains the lease to AOK Rheinland for approximately 18,000 square meters in Porz-Gremberghoven.
In the first nine months of the year, approximately 290 rental agreements were concluded (third quarter of 2019: approximately 310). An analysis of the deals in the various size categories shows in particular that in the 1,000 m² to 5,000 m² segment and in the size category above 5,000 square meters, the number of contracts signed fell by around 80 percent. In the size category up to 1,000 m², similar completion figures were recorded as in the previous year.
The vacancy rate continues to rise, closing the third quarter at around 3.00 percent. This means that the 3.00 percent mark has been reached for the first time since mid-2018 and is expected to be exceeded in the course of the fourth quarter. As a result, the office property market in the cathedral city currently has approximately 241,000 m² of vacant office space available. The increase in vacancies is also attributable to a large number of sublets and subsequent lettings that arose in the wake of the coronavirus pandemic and the fact that companies did not expand as planned.
After the first nine months of this year, the average rent remains below the previous year's level. An average rent of €13.20/m² was recorded. At the end of the third quarter of the previous year, the average rent was still €14.10/m². This continues to be attributable to the lack of large, high-priced lettings, particularly in the city center.
The prime rent also declined compared with the previous year, closing at €23.70/m² at the end of the third quarter (Q3 2019: €25.60/m²). The highest rent achieved in the first quarter of 2020 remains at €28.00/m², close to the previous year's high of €29.00/m².
The forecast for the end of the year remains unchanged due to subdued expectations caused by the coronavirus. The experts at Larbig & Mortag Immobilien anticipate total annual turnover for the Cologne office market of approximately 190,000 m² to 200,000 m². This will certainly also depend on whether lease agreements in the order of 1,000 m² increase and whether another deal in the range of over 10,000 m² is concluded.
