The Düsseldorf market achieved office take-up of 303,500 sq m in 2021, an increase of around 12 percent compared to the weak result of the previous year.
Owner-occupier transaction boosts sales in the 4th quarter
The good result was mainly due to lettings in the second half of the year (almost 200,000 sq m) – in fact, all leases for over 5,000 sq m of office space were concluded between July and December. The 4th quarter was the second-strongest in 2021 with take-up of around 90,000 sq m. The 4th quarter also saw the construction start for the new ToniqII project with a total area of 26,000 sq m in Wanheimer Strasse. After completion in 2023, AOK Rheinland will move into its headquarters here as an owner-occupier. However, just over half of Düsseldorf's take-up (54 percent) was achieved with areas of less than 500 sq m and between 1,000 sq m and 3,000 sq m.
Many large lettings in development projects
"In 2021, we again observed a higher take-up of space in development projects. In particular, some significant major deals took place before the start of construction or during construction," comments Martin Höfler, Head of Office Agency Düsseldorf at Cushman & Wakefield. "For some of these leases in development projects, there are lead times up to completion or to the start of the lease of up to four years. This is a clear indication that large users are have regained confidence about planning their space requirements and design over longer periods of time, while preferring high-quality and modern spaces."
Vacancy rate rises
The office vacancy rate at the end of 2021 is just under 7.8 percent. Compared to the previous year, the amount of office space available at short notice has increased by 11 percent to 718,200 sq m. In addition to the relatively low level of take-up, this is also due to the high completion volume in the 4th quarter. Around a third of the most recently created space is currently still available.
Office completion volume at a high level
In 2021 as a whole, the volume of office completions in Düsseldorf totalled around 167,300 sq m and was thus almost 23 percent above the volume of the previous year. The five-year average was even exceeded by around 34 percent. In the 4th quarter of 2021 alone, a total of around 71,400 sq m of office space was completed. If construction progresses according to plan, the developments currently under construction will reach a completion volume of around 133,500 sq m in 2022. Around 39 percent of this area is currently still available.
Düsseldorf average rents saw strong increase
At the end of the 4th quarter, the prime office rent was EUR 28.50/sq m per month and was achieved in the Central Business District (CBD) submarket. In view of the high demand for modern high-quality space, rising construction costs and high land prices, a slight increase in prime rent is to be expected in the course of 2022.
The weighted average rent of the past twelve months is currently EUR 16.55/sq m per month. Compared to the previous year, this corresponds to an increase of almost eight percent. This is primarily due to the high number of lettings in the mid-range segment between 1,000 sq m and 3,000 sq m in modern and high-priced properties. For 2022, Cushman & Wakefield expects average rents to remain stable.
