Office
Due to the lockdown, activity in the office letting market slowed at end of March and remained at a low level until early June. In Q2, take-up volume in the five major office markets reached 489,100 sq m. In no quarter since Q1 2013 (478,800 sq m), has take-up been so weak. Vacant space increased in Q2 by 8% to 2,974,700 sq m, reflecting an overall vacancy rate of 3.9%.
In the German capital Berlin, take-up at 175,400 sq m was much better than expected, considering the second quarter included the peak of uncertainty and economic impact of the COVID-19 pandemic. During the second quarter of 2020, the vacancy rate rose from 1.6% to 2.0%.
Retail
During the shutdown, most retailers paused their searches for new premises. Many operators asked their landlords to lower rent levels or even to defer rental payments in order to protect liquidity. Some retailers announced that they need to close shops due to financial challenges or insolvency. The number of new lets and new openings announced increased from mid-May, however activity is still at a low level and varies strongly between cities.Industrial
Take-up in Q2 appeared resilient to the difficult economic situation. In total, new leases and construction starts for owner occupation reached 1.336 million sq m making Q2 almost 8% stronger than the first quarter of the year (1.240 million sq m). However, compared to the quarterly average of the last five years, at 1.662 million sq m, the result is weak. Lower take-up figures in the first half were particularly apparent in the manufacturing sector whereas take-up by retailers including ecommerce and 3PLs acting for retailers was less adversely affected.
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