Office Property - Purchase Or Sale Of Office real Estate In Germany

Office Buildings, Office Properties and Office Buildings for sale

Buying and selling office space deals with the most significant market in commercial real estate, and the second-biggest market in general, after private real estate. The term “office” means such premises where individuals, firms/companies or institutions/organizations can exercise their profession and trade. The office building is used for oral and written communication, management and organizing the professional activities of a firm/company. Office properties always have specific purposes to generate revenue from business deals. In general, the returns for the office-space investor are higher than those of an investment in residential real estate. The market for commercial real estate and office real estate, however, is generally more volatile because office spaces are subject to periodic fluctuations based on the nature and profitability of the businesses they contain. Due to inventions and the rapid progress in technology and communication tools, cumulative use of office space is significantly shorter than that of residential properties. The demand for office premises from both buyers and tenants is highly dependent on the current economy. In difficult economic times the demand drops drastically for office properties. In prosperous times, however, demand for office buildings reaches very high levels. Incidentally, the market-segment of commercial real estate or office space is less transparent than that of residential real estate in Germany. The State tends to control this segment, and the official statistics available for so-called Category A Cities are not necessarily authentic. In terms of office space or commercial properties, the real estate industry is different in each of the A, B, C and D cities in Germany. Category A cities combine the most significant market segments for office space in Germany, where the investment turnover is highest and therefore most office buildings are either sold or rented out.

Category “A” Cities/Towns for Office Space: Berlin, Dusseldorf, Frankfurt am Main, Hamburg, Cologne, Munich and Stuttgart.

Category “B” Cities/Towns for Office Space: Bochum, Bonn, Bremen, Dortmund, Dresden, Duisburg, Essen, Hanover, Karlsruhe, Leipzig, Mannheim, Munster, Nuremberg and Wiesbaden.

Category “C” Cities/Towns for Office Space: Aachen, Augsburg, Bielefeld, Braunschweig, Darmstadt, Erfurt, Erlangen, Freiburg, Heidelberg, Kiel, Lubeck, Magdeburg, Mainz, Moenchengladbach, Mulheim (Ruhr), Offenbach, Osnabruck, Potsdam, Regensburg, Rostock, Saarbrucken and Wuppertal.

Category “D” Cities/Towns for Office Space (excerpt): Bergisch Gladbach, Bremerhaven, Gelsenkirchen, Hagen, Hamm, Heilbronn, Ingolstadt, Kaiserslautern, Kassel, Koblenz, Krefeld, Leverkusen, Neuss, Oberhausen, Offenburg, Paderborn Ratingen Recklinghausen, Rosenheim, Siegen, Solingen, Trier, Ulm, Wolfsburg, Wurzburg , Zwickau etc.

In Category ‘A’ cities, primarily institutional investors such as real estate funds, closed-end real estate funds, real estate companies, insurance companies or pension funds invest in real estate. These real estate investors acquire spacious office space in the most sought-after office locations in the Category ‘A’ cities where they can achieve higher rentals. Typically, such locations are in areas such as Berlin, Potsdamer/Leipziger Platz, in Frankfurt's financial district, or the West End, and in the financial districts of Dusseldorf, Hamburg, Cologne, Stuttgart and Munich. The risk of sub-letting at this level is minimal, and because of the large areas of space involved, the office has few units, thus keeping the total administrative costs low. Such are the conditions that motivate most institutional investors to choose sustainable office properties with limited risk and good potential for capital appreciation. The market-segments of Category ‘A’ cities generally have a higher liquidity which provides a significant advantage in both proposed transactions and the actual sale and purchase of office space. The Category B, C and D cities  increasingly allocate office space to private individuals and companies that are not primarily in the real estate investment sector. Transactions concerning office properties in Category A cities are mainly in the double-digit million range, and in the Category B cities they are mostly in the single-digit millions. When selecting an investment in office space, the physical situation of the office building must be analyzed. The value of the space will depend on local infrastructure, public transport (LPT) facilities, and general accessibility by motor vehicles. This is especially relevant for those office properties which not located in heart of the city. The assessment of the situation also includes proximity to key roads or places, proximity to prestigious buildings, and a general assessment of the types of surrounding streets such as pedestrian zones, access roads and service roads. “Image” is also important. A well-known office building with a positive regional or even national image always achieves a higher rent or selling price. The quality of the office equipment must also be checked carefully, as well as the room layouts. Floor plans must be flexible, so that ready adjustment to the rapidly changing conditions of office rental space may be made. Modern communication technology is a further prerequisite for efficient and effective office work. The tenant clientele for office space includes companies from the insurance industry, banking, management consulting, lawyers, accountants and tax consultants.

Buying guides for office properties, office buildings, and office spaces in Germany

KARODI, the real estate company, is your primary contact for the transaction, sale and purchase of office properties, office space and office building investments, especially in the cities of Aachen, Bergisch Gladbach, Berlin, Bonn, Dortmund, Dusseldorf, Essen, Hamburg, Frankfurt, Koblenz, Cologne, Leverkusen, Mainz, Munich, Munster, Neuss, Stuttgart, Solingen, Wiesbaden and Wuppertal. KARODI also operates in the federal states of North Rhine-Westphalia (NRW), Hessen and Rhineland-Palatinate.