Economy: The federal capital of Berlin, with its 3.4 million inhabitants, is the economic centre of eastern Germany. Berlin’s economic structure is characterised by, amongst other things, its status as the seat of government, within whose area the representative offices of embassies, associations and companies have been established in the recent past. Moreover, Berlin has increasingly been able to establish itself in the past few years as an attractive location for research intensive and innovative service industries. Berlin’s economy is in robust shape, despite the tense financial economic environment, according to an assessment by the InvestitionsbankBerlin. The economic cycle forecast is somewhat troubled, but an increase in the GDP growth rate by 1.3% this year still seems realistic. This estimate is also supported by the Business Climate Indicator by the Berlin Chamber of Industry and Commerce.In fact, at 119.4 points at the middle of the year, the indicator exhibited a significantly lower value than at the beginning of the year; nevertheless the business climate is assessed as positive by the Berlin companies who were questioned. The number of employees liable to pay social insurance contributions rose in Berlin at an above average annual rate, to 2.8% (nationally: 2.3%).

Office market overview: The Berlin office market appeared stable in the first half-year compared to the same period in the previous year. Office space take-up of around 200,700 sq m was achieved without any large volume transactions and a comparatively low proportion of owner-occupiers, of around 3%. The vacancy level reduced by 1% and fell to approx. 1,650,800 sq m. The prime rent remained constant at €22.00 /sq m/month compared to the same period last year. In the first half of the year, almost 51,500 sq m of office space was completed on the Berlin office market. Of these, the proportion of speculative completions was around 13%.

Read the full CBRE report below:

Berlin Office Market Report 2008 PDF