- pbbIX increases slightly from 0.3 to 0.4 points
- Inflows on the investment market decrease
Despite the challenging economic and political outlook, the office property index pbbIX has risen for the sixth quarter in a row, performing significantly better than expected. The reason for this was once again the rental space market, which was again offset by a weak investment market. The main driver of this development is likely to be the German economy, which despite all fears was able to record slight growth.
Full order books in the manufacturing industry and the savings of private households built up during the pandemic were the main contributors to economic growth. The labour market was also stable, with employment reaching an all-time high in September. As a result, demand for office space continued and vacancies remained at a moderate level. At the same time, robust demand, supported by high inflation, led to rising rents. On the other hand, higher capital market interest rates and the considerable uncertainties about the further economic development in the third quarter resulted in low inflows of funds on the investment market - although these were higher than in the previous quarter.
However, according to the ifo Business Climate Index, many businesses are concerned about the near future. The war in Ukraine and its impact – in the form of lost export markets, energy price inflation, and supply chain disruptions – are hampering corporate development. Against this background, most economic forecasts conclude that economic performance will weaken in the fourth quarter and lead to a recession lasting several quarters. This will weaken demand for space and probably slow down the slight recovery of the office market.
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