|Munich: A City of Laptops, Leisure and Lederhosen.|
By Colin Dyer - President & CEO of Jones Lang LaSalle, Incorporated
Sunday, 2nd February 2014
At this time of year you can be forgiven for thinking that Munich lives for Oktoberfest; the festival sees 6 million global revellers dress in lederhosen, swill from steins and munch on weisswurst.
But Munich offers much more than a focus for beer lovers. The Bavarian capital is one of Germany’s fastest-growing cities and has an abundance to offer its 1.4 million inhabitants: beautiful architecture, fine culture, leading technology, a varied nightlife and a culture to rival that of its larger city counterparts, such as Berlin and Hamburg.
Pulsing with prosperity and Gemütlichkeit (meaning “cosiness and well-being”), Munich is regularly featured highly in the most liveable city rankings and consistently ranks amongst the most important European metropolitan centres. The aspiring population has the highest purchasing power in comparison to all other major cities in Germany attracts a strong mixture of companies from a multitude of industries.
Research on German commercial real estate supports Munich’s appeal, particularly in the city’s office market. Not only have six DAX companies chosen Munich for their headquarters, but it is also the chosen location for a large and growing number of international and medium-sized companies – particularly in the IT and insurance industries – keen to leverage Munich’s reputation as a centre for commerce, education and innovation.
The office market in Munich is now the largest in Germany, with 20 million square meters office stock, and has the highest take up volumes in the main German office markets.
Moreover, Munich is predicted to grow to 1.6 million inhabitants by 2030, meaning that it will soon have the highest population density across all the major German cities.
As a result of this growing population, average office rents have been rising and now sit at around €14 per sq meter. The highest rents can be found in the southern part of city centre around Lehel, in the historic city-centre, as well as in the northeast of the city along the river Isar.
But Münchners don’t just work hard, they like to shop too. The prime streets in Munich are among Germany’s most popular shopping areas and account for 290,000 sq meters of total retail space. Maximilianstrasse (one of Germany’s most prominent luxury shopping miles), Kaufingerstrasse, Neuhauser Strasse, Theatinerstrasse, Weinstrasse and Residenzstrasse are leading the pack.
These locations can command some of the highest retail rents in Germany, up to €300 per sq meter, as investors and retailers compete for the best investment opportunities and shop locations.
For real estate experts, there is a second annual highlight: EXPO REAL, Europe’s largest annual commercial property and investment conference. Members of the global real estate community will congregate in Munich between 7-9 October to discuss regional opportunities and challenges facing the industry, and where we can toast the immense growth we’ve seen in our 40 years servicing clients in Germany.