Office market economy in Germany weakens again slightly in Q2 2019


Munich, 22 August 2019 – In the second quarter of 2019, the cyclical development on the 7 largest German office markets weakened slightly for a second time, but remained expansionary. The pbbIX office market index fell from 0.79 to 0.73 points. As a result, it is at its lowest level since the third quarter of 2013, but remains well beyond the zero line that describes the long-term trend. The risks for the further development of the major German office markets lie primarily in macroeconomic developments. 
In the second quarter, the BIG7 office markets found themselves in a challenging environment: less favorable economic prospects and political uncertainties depressed the markets, which were at the same time supported by rising office rents, a lack of rental space and a shortage of suitable investment properties. Vacancy rates fell once again and the scarcity of vacant space led to a rise in new contract rents. Despite a noticeably gloomy economic outlook, excess demand suggests that rents will continue to rise for the time being. In addition, interest rates on the capital markets have fallen in recent months. Direct investments on the office property markets have therefore remained attractive from the investors' point of view.
The overall slowdown in the office market economy was also reflected in the individual markets - with the exception of Hamburg, where the pbbIX rose slightly from 0.59 to 0.63 points. The decline was particularly pronounced in Düsseldorf: Following an outperformance in the first quarter (despite a sharp decline to an index level of 1.16 points), the index for the North Rhine-Westphalian capital fell to 0.76 points in the 2nd quarter.
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About pbbIX (
The pbbIX index family comprises a composite index, as well as seven individual indices tracking the key German office property markets of Berlin, Cologne, Dusseldorf, Frankfurt/Main, Hamburg, Munich and Stuttgart (including their respective catchment areas). 
pbbIX describes the development of the office markets. The zero line corresponds to the long-term trend. If the index is above the zero line, the office market is better than the long-term average. From a value of 1.0 points, one speaks of a boom.
The indices, which pbb publishes in cooperation with vdp Research, provide investors and lenders with comprehensive information on the current performance of office properties in Germany.

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