• pbbIX index rises markedly from -0.2 to 0.3 points in the second quarter
• Lettings increased, investments abated
• Net income from properties gains significance
Munich, 25 August 2022 – In the second quarter of 2022, the pbbIX real estate index rose for the fifth time in a row. Posting a significant leap from -0.2 to 0.3 points, the index is back in the positive range for the first time since the first quarter of 2020. This development was mostly down to the office space rental market, not the investment market. The stagnating macroeconomic development had neither a positive nor a negative impact on the index.
With more than one million square metres, office space take-up was high in the second quarter. In the first half of the year, a total of around 1.9 million sqm of office space was newly let in the BIG 7 markets. This is not only an increase of just under 50% year-on-year, but also a very good result even in the context of the last few years. Rising employment also played a role here. There was especially high demand for offices in central locations with high equipment standards that allow for modern workplaces and usage concepts. In addition, average rents (and especially top rents) moved upwards, a trend that is expected to continue, albeit at a slower pace.
On the investment market, the situation is different. With a total investment volume of around €2.2 billion, the level of investments in the BIG 7 markets was very low in the second quarter of 2022 and amounted to only about half of the volume in same quarter of the previous year. The last time there was a lower inflow of funds was in the third quarter of 2013. Restraint in the investment market is reflected in higher initial yields but also the availability of core properties. Growing economic uncertainty is accompanied by a more pronounced investor preference for holding cash. Rising capital market interest rates put pressure on yields to rise as well. Thus, the investment market has lost some of the momentum that was partly responsible for the strong performance of recent years. Net income from office properties remains intact, however. The growth and stability of this income are once again at the heart of investments.
The complete report for the second quarter of 2022 is available at pbbIX.com.