MARKET SENTIMENT SIGNIFICANTLY IMPROVED - TAKE-UP AT PREVIOUS YEAR'S LEVEL
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The Munich office market has started 2025 with a solid take-up and generally more lively market activity. Despite the persistently challenging environment, the mood on the market has turned positive in recent months and the number of large-volume requests has risen noticeably. Take-up amounted to around 137,000 sqm in the first quarter and was therefore on a par with the prior year.
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Munich's office market continues to lack the important economic momentum needed to raise the level of lettings across the board. The long-term average is currently still being missed by just under 21%.
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For the most part, the market has now stabilized on a sustained basis, which applies to lettings of up to 1,000 sqm of rental space. They account for a good third of take-up. While momentum in the mid-sized segment is still volatile, contract signings in the large-volume segment are sending out positive signals. The two largest contracts in the market - Siemens AG with 33,000 sqm and an industrial company with 14,000 sqm - are also examples of the returning confidence in large contracts and the focus of demand on easily accessible, state-of-the-art office space. Both contracts were concluded in project developments.
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For the third quarter in a row, the prime rent is quoted at €53.50 per sqm but remains under upward pressure. In contrast, the average rent continued to rise in Q1 and now stands at €26.50 per sqm (+6.4% year-on-year).