Number of lettings rises significantly, no large-scale deals
The office letting market in Düsseldorf achieved a take-up of around 104,200 square metres in the first half of 2021. Compared to the previous year's result, this is a decline of 36 %. Compared to the 5-year average, take-up is also down, by 49%. Nevertheless, office take-up has now shown slight growth for three quarters in a row. In the second quarter, take-up was 14% higher than in the first quarter of 2021. However, even in the second quarter, Düsseldorf’s office letting market lacked large deals above 5,000 square metres, which is the decisive factor behind the persistently low take-up volume. The largest deal of the year so far remains the leasing of almost 4,400 square metres by Mitsubishi Chemicals in the Linksrheinisch submarket in the first quarter. The actual number of leases signed, 232 in total, was 52% higher than in the same period last year.
Large users analyse demand closely
"The effects of the pandemic continue to determine the leasing decisions of large users in particular and are causing restraint in the majority of cases," explains Luisa Rotthaus, Branch Manager and Head of Office Agency in Düsseldorf at Cushman & Wakefield. "Large corporates are currently analysing future space requirements very closely, especially with regard to the future proportion of remote working and the choice of office concept. Due to the decline in new infections and the relaxation of restrictions, companies with space requirements of up to 500 square metres are clearly more willing to rent, and the number of deals in this segment is almost back to the pre-pandemic level. In view of the limited number of active major searches and longer review processes, we expect a take-up result of below 300,000 square metres by the end of the year."
Vacancy rate continues to rise only slightly
The office vacancy rate at the end of the second quarter is just under 7.1% and has increased only slightly compared to the same time last year (6.8%). Overall, the total amount of available office space for immediate occupancy has risen by just under 5% to around 652,400 square metres in the last twelve months.
High pre-letting rate in development projects
In the first half of 2021, the completed office space totals around 89,600 square metres. No higher H1 completion volume has been recorded since 2014. If construction progresses according to plan, another 72,000 square metres of office space will be ready for occupancy by the end of the year, of which a good 84% has already been allocated to users. Of the developments currently under construction with completion by 2024, the majority are in the Airport City and North submarkets. In total, the office completion pipeline in Düsseldorf amounts to around 242,700 square metres, of which a good 76% has already been let.
Average rent increases slightly in the second quarter
The achievable prime office rent at the end of the second quarter is 28.50 euros per square metre and month, achieved in the Central Business District (CBD) submarket. Despite the COVID-19 pandemic, the Düsseldorf office market has now been able to maintain its current high prime rent level for three consecutive quarters.
The weighted average rent for the past 12 months is currently 15.64 euros per square metre per month. Compared to the same point last year, the decline is slightly more than one euro, or around 6 %. Nevertheless, a slight increase was recorded in the second quarter for the first time since the beginning of the year.
No change in prime rent level is expected to the end of the year, as neither a significant increase in the vacancy rate is to be feared, nor is a significant or above-average letting performance expected in H2.