Then as now, investors remain focused on prime property and seemingly secure commitments in Germany’s "Big Seven" cities (Berlin, Cologne, Düsseldorf, Frankfurt, Hamburg, Munich and Stuttgart). However, supply in these places is drying up. This makes regional office markets all the more important as alternative locations.
The "GERMANY 21: Regional Office Index" shows that the 14 key regional markets (Aachen, Bonn, Bremen, Dortmund, Dresden, Essen, Hanover, Karlsruhe, Leipzig, Mainz, Mannheim, Münster, Nuremberg, Wiesbaden) we surveyed in addition to the "Big Seven" cities performed rather well. Office rents in the regional markets are expected to remain stable or to grow slightly. Arguably, this implies they harbour sound investment potential for real estate investors. Unlike the fiercely contested investment markets of the "Big Seven" cities, you can still find attractive entry-level prices and sustainably great yield prospects.
The key regional cities benefit from a prospering economic basis and thus from the associated stable demand for office space. Other criteria underlying the selection of cities in the index include the following:
- Absolute size of the office market
- Significance of office employment for the regional macro-economy
- Excellent historic and positive future demand trends
The "GERMANY 21: Regional Office Index" is published semi-annually, the focal city of the 9th edition is Mannheim.