According to Savills, Berlin lacks office space suitable for the TMT sector as the firm forecasts this industry will grow 5% by 2018 demanding a further 100,000 sq m of office stock.
According to Savills, Berlin lacks office space suitable for the TMT sector as the firm forecasts this industry will grow 5% by 2018 demanding a further 100,000 sq m of office stock.
Boosted by new technological developments over the past years, Savills reports there are now 5,800 TMT businesses registered in the city, employing about 83,000 workers and generating a turnover of €10bn each year. Furthermore, Berlin has been named one of the globe’s top 20 start up hubs, according to a survey by Telefonica, but suggests a more mature hub lies ahead when comparing to cities such as London. The report indicates that landlords and developers will benefit if they acknowledge specific requirements from these occupiers.
Savills finds that start ups have increased take up from 22.2% in 2010 to 54.8% in 2012 within the TMT sector. Firms typically cluster around Rosenthaler Platz and northern Mitte district, northern Kreuzberg and Prenzlauer Berg. Compared to more established TMT businesses they take about 18% less space and pay lower rents. TMT businesses typically paid €156 per sq m/year, while start ups in this sector pay €142 sq m/year with lease lengths at 3.5 years compared to 3.1 years respectively against the typical 5 year lease for the rest of the market.
Julia Maurer of Savills European research says: “Berlin does lag behind cities such as London primarily due to the fact it lacks funding and infrastructure support but this is expected to change. Government support will make it easier for young entrepreneurs to capitalise and thus stay and develop business. Berlin office solutions that support start ups will capitalise on this market, and this should not be challenging as the city has a wide range of options for developing this kind of space and could significantly compete on pricing with more established TMT hubs across Europe.”