Commercial real estate market: robust take-up despite corona

Olaf Mahlstedt

Hanover region. At mid-year 2021, office space take-up was around 55,000 square meters. In the logistics and industrial real estate sector, take-up of around 200,000 square meters of warehouse space was recorded at mid-year. These are the preliminary results of the panel of local real estate experts from the companies that work together with the regional economic development agency and the consulting firm bulwiengesa AG on the Hannover Real Estate Market Report every year.

The prime rent in the city center remained stable at EUR 17/sqm at mid-year, and EUR 15.30/sqm on the arterial roads. For logistics properties, there was a slight increase in both the prime rent to EUR 5.30/sqm and the average rent to EUR 4.40/sqm (plus 10 cents in each case).

Based on these initial results for office and logistics, only limited forecasts for the rest of the year and the other submarkets can be made at mid-year. The situation in the retail and hotel property sector in particular continues to be negatively impacted by the effects of the coronavirus pandemic.

Depending on how the coronavirus pandemic develops over the next few months, the regional submarkets will have to deal with varying degrees of impact into next year. However, the real estate companies active in Hanover are generally optimistic about the coming months.

"Hannover has been perceived as a strong real estate location in Germany for years," says Ulf-Birger Franz, Head of Economic Affairs. "Despite all the difficulties of the past year and a half, the Hannover Region remains a sought-after location for development and investment. To keep it that way, we need to set new and exciting trends in areas such as technology, leisure and retail."

Sabine Tegtmeyer-Dette, First City Councillor and Head of Economic and Environmental Affairs for the City of Hanover, is also confident about the current data:

"The state capital of Hanover in particular, as the region's real estate core, is now benefiting from the long-term plans and developments, and the location's often-invoked resilience is now clearly visible."

Together with 22 partners from the real estate industry, the Hannover Region is currently compiling data, trends and market sentiment on all submarkets in the region and preparing these together with the consulting firm bulwiengesa AG.

The current plan is to present the real estate market report at the international commercial real estate trade fair EXPOREAL in Munich from October 11 to 13, 2021 and to publish the results both in print and online. Assessments of the current situation and forecasts in the office, logistics, residential, retail and hotel submarkets will then also be available with the market data available by then.

The 2021 real estate market report is expected to be available for download at www.wirtschaftsfoerderung-hannover.de from mid-October 2021.