In 2022 as a whole, the Düsseldorf office letting market achieved a take-up of 284,100 sq m. This is comparable to the modest levels of the two preceding years. After there were no major lettings in the third quarter, four major deals were signed in the fourth quarter. Thus, a total of 78,900 sq m of office space was let or allocated to owner-occupiers in the final quarter. Among the major deals in the fourth quarter, the public sector owner-occupancy of the 12,900 sq m DoubleU office building in the Kennedydamm submarket, is particularly noteworthy.
Vacancy rate exceeds the 8 percent mark
The vacancy rate at the end of the 4th quarter was 8.1 percent. At the end of the previous year it was 7.8 percent. The main reason for this is an increased supply of subletting space. Numerous large users are now making space available to the market due to their changed requirements. At the end of the year, the amount of office space available to let for immediate occupancy amounted to 753,200 sq m.
Office pipeline reaches new record level
The office completion volume for the full year 2022 amounts to 113,600 sq m. Although this means that significantly less office space was completed than in the previous year and less than the average of the past five years, the pipeline currently under construction and nearing completion is extensive.
A total of around 376,500 sq m of office space is currently under construction in Düsseldorf, the majority of which (148,400 sq m) is scheduled to be ready for occupation as early as 2023. Never before has there been a higher construction volume at the end of a year. At the current time, 32 percent of the projects under construction are already let or allocated to owner-occupiers.
Prime rent jumps to record level in 4th quarter
The sustainable prime office rent in Düsseldorf jumped by EUR 5.00/sq m per month within a single quarter at the end of the year, to a new record level of EUR 35.00/sq m per month. This prime rent is achieved in the Central Business District (CBD) submarket. The realized prime rent (median of the most expensive leases concluded within the past 12 months) is currently EUR 33.30/sq m per month. Compared to the previous quarter, this represents an increase of around 13 percent (+ EUR 3.80/sq m).
Martin Höfler, Head of Office Agency Düsseldorf at Cushman & Wakefield, explains: "The above-average increase in the achievable prime rent to EUR 35.00/sq m per month is the result of the high quality and location requirements of tenants. They prefer space in modern project developments. ESG requirements and higher construction costs are also causing rents to rise. Individual leases are being agreed at even higher rents, a trend that will see prime rents continue to rise over the course of 2023."
The weighted average rent has continued to rise over the past twelve months and stands at EUR 19.50/sq m per month at the end of Q4. Here, recently concluded high-priced large lettings have once again significantly increased the average rent level.