In the first quarter of 2023, the Düsseldorf office market achieved take-up of around 60,000 sq m. This corresponds to a decline in take-up of just under 10 percent in the course of 12 months, while still higher than Q1 2021. The Q1 five-year average is around 80,000 sq m.
Nevertheless, two major deals were registered at the start of the year. Commercial law firm Hengeler Müller leased around 9,600 sq m of office space in the Trinkhaus Karree at Königsallee 21-23 in the CBD submarket. The former HSBC headquarters is currently undergoing extensive refurbishment. In addition, automotive supplier NGK Spark Plug leased around 5,600 sq m in the Schwarzbach Quartier in the Ratingen East submarket.
Vacancy rate still trending upwards
Office space available for immediate occupancy totals 880,000 sq m, an increase of 21 percent compared to Q1 2022. The office vacancy rate has risen to 9.4 percent, the same level as in 2015. The increase is primarily the result of a significant increase in subletting space, whereby supply has tripled in the last 12 months, from 52,000 sq m to around 150,000 sq m.
Martin Höfler, Head of Office Agency Düsseldorf at Cushman & Wakefield, explains: "Subletting space now accounts for a good 17 percent of total vacancy. This is an increasingly interesting secondary market for office users. The supply is very heterogeneous with regard to the quality of the property and location, but companies can still find high-quality, low-cost rental opportunities available at short notice in plug & play style. Tenants will also benefit from this supply reserve in the medium term."
Still a large amount of office space under construction
At the beginning of the year, office completions were at a low level of around 3,000 sq m. Currently, around 75,000 sq m of office space is under construction for completion in 2023, so notwithstanding deviations from current planning, a completion volume of around 78,000 sq m is likely for 2023 as a whole. Of this, just under half (48 percent) was still available at the end of the first quarter of 2023.
In total, around 363,000 sq m of office space is under construction in Düsseldorf. The proportion of revitalisations or core refurbishments in existing buildings has increased significantly. Currently, almost 28 percent (105,000 sq m) of new office space is within extant buildings - in the same period last year (Q1 2022) this figure was around 59,000 sq m and in Q1 2021 only 17,000 sq m.
Further increase in prime office rents
The sustainable prime office rent in Düsseldorf was 38.00 euros/sq m per month at the end of the first quarter of 2023, rising from 28.50 euros/sq m per month a year previously. Prime rents are still being achieved in the Central Business District (CBD) submarket. Due to the high demand and the completions planned for 2023 and beyond in the CBD area, the prime office rent will remain at this level at least until the end of the year.
The high-priced and in some cases large-scale lettings of the past 12 months have caused the weighted average rent to rise further. It currently stands at 20.80 euros/sq m per month and is thus around 26 percent or 4.35 euros/sq m higher than in the first quarter of last year.
