The Bonn office rental market is significantly below the five-year average for the first half of 2022! Historically low vacancy rates and a lack of large-scale rentals characterized the first six months.
After the excellent rental results for the full year 2021, despite the pandemic situation, the first half of 2022 was unable to match the strong market momentum of the previous year. By June 30, 2022, only one lease agreement for 5,000 square meters had been concluded (full year 2021: 8). Within the first six months of 2022, 37 lease agreements were analyzed – at the same valuation date last year, 51 lease agreements had already been identified. The public sector remains a key pillar of the Bonn office rental market, accounting for around 62.0 percent of the market share.
According to the Bonn-based real estate agency Larbig & Mortag Immobilien, several factors are primarily responsible for the decline in turnover. On the one hand, the historically low vacancy rate (first half of 2022: 1.65 percent) is causing aon the other hand, the overall situation surrounding rising inflation, political disputes, and fears of potential renewed restrictions due to the coronavirus pandemic in the further course of the year are contributing to caution among companies when it comes to spatial changes. In addition, many seekers are currently in the process of finding future-proof office structures. At present, the Federal Agency for Real Estate (BImA) is initiating few to no new exploratory procedures.
The rental agreements concluded result in a rental performance of approximately 36,564 m² for the first half of 2022. Despite a significant reduction in enquiries, the public administration sector remains the main tenant of office space on the Bonn office rental market. However, it should be noted that the leases concluded were the result of enquiries made in previous years. This sector secured around 22,657 m² of office space (market share: 62.0 percent).
The extent to which the Bonn office rental market is dependent on this sector is shown by the rental agreements for space larger than 2,000 square meters. In the first six months of 2022, only four lease agreements were concluded in this segment. The only major deal, covering around 18,700 m², already accounts for a market share of around 51.0% of space take-up. This lease was concluded by the Federal Agency for Real Estate (BfR) for the property at Friedrich-Ebert-Allee 114-116. The Bonn-based specialists at Larbig & Mortag were able to successfully negotiate a lease extension of a further 30,000 sqm for Deutsche Telekom However, as this was an extension of the office space already leased by the user, this space sale does not count toward the leasing result according to the gif definition.
Demand remains dynamic in the 200 m² to 500 m² segment. A total of 16 lease agreements were concluded here, accounting for around 43.2 percent of all lease agreements recorded.
In the size category between 500 m² and 1,000 m², four rental agreements were concluded in the first six months of 2022 – at the same time in 2021, three new rental agreements were concluded in this size segment. The space segment between 1,000 m² and 2,000 m² is traditionally difficult to serve in Bonn. In the first half of 2022, no lease agreements for office space in this size category were identified. This development is due to the lack of space available in this size category and the indecision of users of this size category with regard to the future model of their own office work. Average and maximum rents are under pressure and were calculated at EUR 12.48/m² and EUR 20.50/m². Compared to the previous year, these figures have fallen significantly by EUR 0.50/m² and EUR 3.50/m² respectively. However, this snapshot will change again in the second half of the year to reflect the usual results of previous years, as further lease agreements are expected to be concluded in the upper rent segment.
The vacancy rate will remain critical in the course of 2022, reaching 1.65 percent at the end of the first half of the year, almost the lowest vacancy rate in the last ten years. Only in 2018 was an even lower vacancy rate of 1.60 percent achieved. In total, only around 69,000 square meters of office space will be available for short-term occupancy on the Bonn office rental market. Compared to 2021 (1.87 percent), the vacancy rate has fallen by around 0.22 percentage points.
Larbig & Mortag Immobilien expects further deals above the 10,000 m² mark and above 20,000 m² of rental space in the second half of the year. Activity for spaces up to 1,000 square meters will remain high, undeterred by the current global multi-crisis, and will generate lease agreements. The decisive factors will be the demand situation from companies in the private sector for space above 1,000 m² and from the largest space users, the Federal Agency for Real Estate and the University of Bonn. The total annual performance forecast of between 90,000 m² and 100,000 m² at the end of 2021 remains realistic and would be a very good overall result for the year, taking into account all current social challenges.
