Europe’s Top 20 Office Property Markets: Berlin Rents Rocket — London Left Behind

Black Label Properties

Berlin is top of the list of European office locations, according to a recent report by Scope, an independent rating agency. They identified the 20 most important office locations in Europe and Berlin came out top for office investment.

For the next five years, analysts are expecting an average rental price growth of 4.4%, which puts Berlin at the top of the top 20 locations in Europe. This is followed by Munich where rents are forecast to increase by 3% per year and Frankfurt, at 2.7%. Madrid is the only other European country set to experience similar levels of growth, at 3.6% annually.

So what has triggered the boom?

Scope analysts looked at rental price development in European cities, and various economic aspects to predict the city’s potential over the next few years. They considered the number of planned construction projects, economic growth, the employment market, job vacancies, population growth, and a low office vacancy rate — all areas where Berlin has performed well over recent years.

“Berlin shows the greatest dynamics in the creation of office workplaces from the German top seven metropolises,” says Scope expert Manfred Binsfield. “Over the past three years, the number of office workplaces in Berlin has increased by 4%. In Munich, it was 3%, in Hamburg, Frankfurt and Dusseldorf, 2% each.” Berlin is the startup centre of Europe, see our recent news release: Berlin is the Startup Capital of Europe With One Starting Every 20 Minutes.

“There is enormous potential for business-related service companies in Berlin. The presence of major research hubs, such as the one based around Berlin-Adlershof, is definitely bearing fruit. The networking between these high-tech companies and the many renowned universities is having an increasingly positive effect — and leading to corresponding company settlements,” adds Scope.

Employment growth on the Spree is set to continue and more space is being let — the office workspace vacancy rate dropped from 9 to just 3% this year — perhaps not so great for startups looking for affordable office space (we can advise on suitable locations close to the centre), but it’s excellent news for investors.

Berlin’s financial district — Shutterstock

Why now is a good time to invest

A growing labour market, uncertainty over Brexit, company relocations, world-class education system and a population influx is driving the need for more quality, affordable housing in Berlin. We are seeing increasing demand for micro-apartments — 2/3 room properties that can be easily rented. Developers have to take into account changing lifestyles — short-term job contracts, studies, expats, startups, and Germany’s strong rental culture, which has created a demand for flexible and affordable property that also meets a social need: a ready-made community via concierge services, fitness and social amenities. Over the next 5 years, almost 30 high rise buildings will be built in Berlin that will hopefully meet these needs.

Cranes are a permanent fixture on the Berlin skyline — it is a city that thrives on change and reinvention and is embracing its position at the heart of Europe, attracting young people and entrepreneurs from all over the world.

Why wouldn’t you want a slice of that pie?

Do you have any questions about property investment in Berlin? Contact us for more advice:


German Real Estate News —

Like what you read? Give Achim Amann a round of applause.

From a quick cheer to a standing ovation, clap to show how much you enjoyed this story.