An increase in take-up of co-working spaces throughout Germany
The trend of “flexible office spaces” is gaining momentum and is reflected in the seven major cities of Germany
Interestingly, co-working is a fairly new trend in Germany, which was virtually nonexistent in 2016. Today, we see about 360,000 square meters of such offices in Germany’s major office real estate markets. According to experts, in the first three quarters of 2018 the number of flexible offices was 170,000 square meters in the seven major cities of Germany (Berlin, Hamburg, Munich, Düsseldorf, Cologne, Frankfurt and Stuttgart), representing 6% of office areas in that period. Occupancy in Berlin stood at 20,000 square meters, 50,000 square meters in Munich and 43,000 square meters in Frankfurt.
The real difficulty is finding suitable space for renters within the “big 7” boundaries, especially for those looking for an office space of 4,000-10,000 sq.m. When it comes to Berlin, experts believe that if there was more space available occupancy would rise accordingly, since the main problem is availability rather than demand.
The amount of flexible office space has risen by 25% in the last year, which is equivalent to an additional 500,000 sq. m of office space, of which about 75,000 sq. m have been leased in Berlin over the past year, in contrast with 14,000 the year before.
In addition, WeWork is expected to expand its offices in Berlin. Start-ups need spaces of this kind because they cannot predict exactly where they will be in five years. However, demand among established companies remains high as well.
As of now, 1% of the office space in the real estate market of the seven largest cities in Germany is made up of co-working offices, compared with 2% -4% in London, Singapore, San Francisco and Amsterdam’s markets, but more companies are expected to move larger parts their offices for co-working spaces, and even if this number gets to 5%, there will be severe commercialization of vacant spaces of this kind.
“Part of the problem”, experts say, “is the unwillingness of property owners to rent their properties for this specific use, and instead they prefer working directly with companies.”