Decline in pbbIX halted in the second quarter of 2024

The pbbIX index ended the second quarter of 2024 at -1.95 points (Q1 2024: -2.01; Q4 2023: -1.96), putting an end to six consecutive quarters of downtrend in place since the end of 2022. This could indicate that the German office markets are starting to bottom out.

The most recent report is available here

pbbIX – The pbb office property index

How pbbIX works

Real estate markets do not develop continuously and without setbacks, but are characterised by cyclical fluctuations. The office property index pbbIX measures these cyclical fluctuations and thus provides real estate investors and lenders with reliable information on the current office property market situation in Germany.

pbbIX is available for the seven most important German office markets (Berlin, Hamburg, Munich, Cologne, Frankfurt, Dusseldorf and Stuttgart) including their respective catchment areas, as well as an aggregated index for the top seven markets.

Cyclical fluctuations are driven, on the one hand, by macroeconomic developments – and on the other hand, by the development of the investment and rental markets. pbbIX is the only indicator that takes all three factors into account: it also uses verifiable statistical data, processing these in an established method of economic cycle analysis.

Since the third quarter 2018 the pbbIX index is calculated and published on a quarterly basis. 

Index history

Looking at the performance of the German office property market over the past two decades, a permanent change between good and bad times is obvious. For instance, the dot-com boom around the millennium triggered very strong demand for new office space. Shortly afterwards, strong new construction activity – driven by this trend – led to a pronounced correction phase, when falling rents and rising vacancies led to significant price losses and impairments. 

The subsequent phase was characterised by strong interest from international investors. From 2004 onwards, the German office property market saw an unprecedented buying spree of yield-driven investors, which only came to an abrupt end in 2009 in the wake of the financial markets crisis. The pbbIX hit its low at the end of 2008 and the beginning of 2009 (Q4 2008: -2.31; Q1 2009: -2.21). 

The big 7 markets for office properties in Germany have seen an extraordinarily long uptrend since mid 2022, supported by both the rental and the investment market. The pbbIX Germany index reached its peak of 1.30 points in the third quarter of 2016.

Disclaimer

Deutsche Pfandbriefbank AG (pbb) is the sponsor of this index. Solely vdpResearch GmbH, Berlin, is responsible for its contents.

pbb does not verify the figures and other information used and does not accept any liability for the content. It shall not be obliged to correct or point out any inaccuracies or incompleteness. pbb may stop publication at any time.

Any liability for negligence on the part of pbb shall be excluded unless it is a matter of injury to life, limb or health, and unless such exclusion of liability is excluded for other mandatory legal reasons. All legal relationships arising from, or in connection with, this index in relation to pbb shall be governed solely by the substantive law of the Federal Republic of Germany. Exclusive legal venue shall be Munich, as far as this can be permissibly agreed upon.

Data and information contained are based on sources and methodical approaches which vdpResearch GmbH considers to be reliable. However, vdpResearch GmbH cannot guarantee the accuracy or completeness of the information provided. Any opinions expressed reflect the current views of vdpResearch GmbH. However, no assurance can be given with regard to the content of such opinions or forecasts.

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