Offices to rent directly from the owner

Brokerage-free office rental: Growing demand leads to rising prices

The rental market for offices and medical practices in Germany has been characterized by diverging trends for several years: Demand for office space, particularly in prime locations, is currently high, and in some places there is already a shortage of supply in this area. As a result, top rents for office space are rising. At the same time, there are still major vacancies in peripheral locations and in older buildings with poorer facilities. Nevertheless, the good economic situation after the euro crisis subsided and the increasing number of office employees have also led to the vacancy rate falling below nine percent in 2012 for the first time in almost ten years, according to DG HYP. Average rents also rose in 2011 and 2012, with the rate of increase for less sought-after properties at three percent, but six percent for prime locations, according to the DG HYP study. However, it is not only the location that determines the rental price. Although the location and the associated accessibility by public and private transport are decisive criteria, the external condition of the building, the respective size of the individual office spaces and the equipment in the areas of electrics and cabling, air conditioning and the likealso play a role.

Booming real estate markets: office rents in Stuttgart and Berlin

Accordingly, the level of rents in the office and medical practice sector shows a wide range. Take Stuttgart, for example: Here, too, in the capital of Baden-Württemberg, the good economic situation is making itself felt in the form of rising commercial rents. According to a survey by the local Chamber of Industry and Commerce, the average rent for office space in 2011 was 11.10 euros, which means that rents in the districts of Stuttgart close to the city center have risen by a full 11 percent since 2007. Companies here have to pay up to 17 euros per square meter for top properties, while the average rent in less desirable locations in the Stuttgart region, such as Waiblingen, is only 7.40 euros per square meter. The differences are similarly large in the German capital Berlin, where office space rentals reached a record high in 2012. As the newspaper Der Tagesspiegel reported at the beginning of 2013, rents for office and medical practice space rose in line with growing demand and averaged 13.20 euros per square meter in 2012, with top prices of 22.00 euros being achieved in some cases. However, the big advantage over residential properties, even in sought-after cities such as Stuttgart or Berlin, is that most offices are brokered for the tenant without a broker's commission.

Wide range of commission-free office space

Anyone interested in renting office or practice space should be aware of some special features compared to the brokerage practice for residential real estate. This is because the amount of the broker's commission is not regulated by law. While real estate agents are not allowed to charge more than twice the basic rent for residential properties, the brokerage fee for office leases is freely negotiable. However, a look at local rental offers also shows that office properties are much more frequently rented out free of commission for the tenant than apartments. In this area, therefore, the chances of finding a commission-free property in a good location and with upscale amenities are much greater than when looking for an apartment or residential building.

Source: Study: Real Estate Market Germany 2013/2014, prepared by DG HYP

Source: Study: Real Estate Market Germany 2013/2014, prepared by DG HYP