Development in the Ruhr Metropolis
16.9 m m²
Volume of office space
Volume of new construction
Top rent level
The volume of office space in the Ruhr Metropolis at the end of 2018 totalled approximately 16.9 m m² CRS. With this, it remains the second-largest office market in Germany, after Berlin.
The volume of new construction totalled approx. 173,000 m² CRS, failing to reach the high volumes of the previous year, but nonetheless above the 5-/10-year average.
Compared to the A cities, the Ruhr Metropolis is beaten only by the capital, which recorded around 257,000 m² CRS.
The highest volumes were registered in Essen and Dortmund, with around 33,000 m² CRS each.
In 2019, according to the specific project pipeline for the Ruhr Metropolis a completion volume of just over 114,000 m² CRS is anticipated. Declines are expected in Bochum, Duisburg and Essen in particular.
Vacancy levels in the Ruhr Metropolis fell again clearly compared to the previous year, ending the year just below 700,000 m² CRS, corresponding to a vacancy rate of 4.1 %.
Vacancy remained concentrated on older properties with limited marketability. Newly-built properties and properties with a contemporary finish were generally very well received on the market.
Against the background of the forecast, moderate completion figures for 2019, the supply situation is set to tighten further in a number of sub-markets of the Ruhr Metropolis.
Office space turnover in the Ruhr Metropolis stood at around 500,000 m² CRS in 2018, clearly above the level of the 10-year mean of 465,000 m² CRS.
This means that the Ruhr Metropolis exceeds the turnover recorded for Düsseldorf (331,000 m² CRS), Cologne (300,000 m² CRS) and Stuttgart (213,000 m² CRS).
In this, the short supply in a number of sub-markets of the Ruhr Metropolis prevented a better turnover result.
A rise in office employment figures is anticipated in the Ruhr Metropolis in the short to medium term, indicating avid demand for office space in the future. Office space turnover above 500,000 m² CRS appears to be highly realistic in 2019.
The peak rent in the Ruhr Metropolis displayed stable development in 2018, standing at 15.00 euro/m² CRS at the end of the reporting period. In individual cases, properties with above-average equipment levels in highly coveted locations (Essen Rüttenscheid/Bredeney and Südviertel, Dortmund City/Wall locations) achieve rents above 15.00 euro/m² CRS.The remaining office location categories were characterised by positive development. A rent increase to a peak of 15.50 euro/m² CRS is anticipated for 2019.Decisive here is the increasing scarcity of supply coupled with moderate construction activity, maintaining pressure on rents.
The average rents in the Ruhr Metropolis have developed slightly positively. The mean average rent for city-centre locations of all sub-markets in the Ruhr region stood at 7.90 euro/m² within the year, approximately 0.10 euro/m² above the previous year.
The mean average rent of the office centres stood at 9.16 euro/m², also slightly above the level of the previous year. The higher level in office centres compared to city-centre locations is due on the one hand to lower case numbers, also in view of the fact that a number of sub-markets in the Ruhr Metropolis do not have any office centre locations. As a result, sub-markets with above-average rent levels in office centres carry more weight in the evaluation. On the other hand, office centres typically have a somewhat younger building stock, which generates higher average rental agreements.
Net Initial Returns
In 2018 office properties were the investment class with the highest demand in the commercial investment market of the Ruhr Metropolis, with a share of turnover of some 50 % (1.3 billion euros). The high demand for office real estate resulted in a further fall of 10 basis points in the net initial return for properties in central locations, to 4.4 % at the end of 2018. With this, the Ruhr region lies 140 basis points above the mean for A locations, where the yields sank again slightly in the course of 2018.
The prime yields in the Ruhr Metropolis are achieved in Essen, followed by Dortmund with 4.5 % and Bochum with 5.0 %. Individually, the net initial yields for modern properties in central locations are even below the 4 % level.
In 2019 the prime yield is forecast to fall another 10 to 20 basis points as a result of the ongoing investment pressure in the low interest environment.
The mean net initial returns for decentral locations in the Ruhr region stood at 7.7 % at the end of 2018, 20 basis points below the level of the previous year.