3rd Quarter 2017: Rents, Vacancy, Take-up on the Stuttgart Office Market

Despite the lack of available office space, Stuttgart again achieved an above-average letting result of approx. 223,000 sqm in the first nine months of the year. Take-up was at its highest in the third quarter with 107,000 sqm, compared with 75,000 sqm in the first quarter and 41,000 sqm in the second.

Annual take-up is unlikely to match last year’s exceptional result of 432,000 sqm and is more likely to reach 300,000 sqm, exceeding the 10-year average of approx. 243,000 sqm. The biggest letting of the year so far was Daimler's owner-occupier deal of approx. 50,000 sqm in Leinfelden-Echterdingen, which also made this the strongest performing submarket. As a result of the CMS Hasche Sigle letting of approx. 11,300 sqm in Ferdinand-Piëch-Holding’s Calwer Passage project, the city centre and downtown submarkets registered significant take-up volumes. Manufacturing and consultancy were the most active sectors.  

Dramatic fall in vacancy

There has been a significant widening of the gap between the sustained high-level of demand and the supply in the office market. The volume of vacancies also reduced in the third quarter to reach just 169,000 sqm. Based on a total office stock of around 7,800,000 sqm, this equates to a historically low vacancy rate of 2.2%. This shortage of space is no longer just affecting the city centre and downtown office locations, but is also now spreading to peripheral areas. High-quality office space is particularly difficult to find in the short term and this extremely tense situation is unlikely to improve in the foreseeable future. Prime rents have remained stable since rising to €24.00/sqm/month at the end of the first half of the year, which is the highest level ever recorded in Stuttgart. However, there was an increase in the average rent from €13.10 to €13.60/sqm.