With a space take-up of around 88,000 square metres, the office letting volume in the first quarter of 2022 exceeded the two previous years by 167 per cent. After a Covid-induced stagnation, many companies are now showing an increasing demand for office space.
The three largest signings in the first quarter accounted for a letting volume of around 39,500 square metres. 21,500 square metres were concluded in an owner-occupier deal by Ed. Züblin AG. The construction company has hereby confirmed its commitment to further growth at its headquarters in Stuttgart-Möhringen. In addition, ca. 9,500 square metres were rented by the Stuttgart Office for Digitalisation at the office complex “Bülowbogen”. The IT-company Bechtele has signed a lease for approx. 7,500 square metres of office space at “Sternhöhe”, the former HQ of Daimler AG in Stuttgart-Möhringen.
Due to the large-volume lease by Ed. Züblin AG, the Construction sector accounted for the greatest demand in Q1/ 2022, followed by Consulting companies with around 15 per cent of the overall space take-up Especially Human Resources Consultancies were showing a clear increase in rental activities. Also the IT-/ Telecommunications sector is currently experiencing high growth rates reflected in a market share of ca. 13 per cent. The largest letting volumes were achieved at the CBD and Inner City of Stuttgart, as well as at the southern sub-market of Vaihingen-Möhringen.
By 31 March 2022, around 300,000 square metres of office space were shortly available on the Stuttgart Office Market. Against the backdrop of an overall office stock of ca. 8.38 million square metres, this figure corresponds to a vacancy rate of 3.6 per cent and an increase of 0.5 per cent compared with the previous year. While some space has been released at existing office buildings, the vacancy rate also rose due to various new build completions, such as “Valley One24” at Stuttgart-East and “leo BUSINESS CAMPUS STUTTGART” in Bad Cannstatt. Sub-letting opportunities accounted for ca. 11 per cent of the available space on the Stuttgart Office Market.
By the end of 2022, around 156,000 square metres of newly built office space will have been completed at a pre-letting rate of 64 per cent. For 2023, the projected completion volume lies at approx. 83,500 square metres, with no pre-letting yet. At the same time, developers are becoming more cautious. In view of the current macro-economic risks, development projects are now subject to pre-letting again.
Despite economic challenges, a significant increase in rent levels has been recorded on the Stuttgart Office Market. By 31 March 2022, premium rents ranged at 29.40 euros per square metre, an increase of 18 per cent compared with the previous year. Such rent levels were achieved for high-quality existing office units at the CBD of Stuttgart. A further increase in premium rents can be expected here, as several new build projects are currently being implemented. In the first quarter, average rents on the Stuttgart Office Market including Leinfelden-Echterdingen achieved 17.20 euro per square metre, 5 per cent more than in the previous year.
For the year 2022, E & G Real Estate project a space take-up of minimum 230,000 square metres – on the basis that the current geopolitical events do not have a major impact on the economy of the Stuttgart Region, which may cause companies to postpone their rental decisions once again.