Hardly any major office lettings in Dusseldorf

In H1 2023, the office leasing market in Düsseldorf achieved take-up of only 93,000 sq m. The result is 43 percent lower than in the equivalent period last year. The last half-year result of 100,000 sq m was in 2005. In particular, the number of large lettings of over 5,000 sq m remained very low over the course of the year. In Q2, no lettings of this size were registered at all – and so the conclusion of Hengeler Müller's Q1 lease for around 9,600 sq m in the Trinkhaus Karree in the CBD submarket remains the largest deal in the course of the year so far. The next-largest letting, of 5,600 sq m was to automotive supplier NGK Spark Plug in Schwarzbach Quartier in the Ratingen-East submarket. 

Martin Höfler, Head of Office Agency Düsseldorf at Cushman & Wakefield, explained:
"The space requirements of many companies have changed as a result of the Covid-19 pandemic and the economic slowdown. Companies need to familiarise themselves with new requirements such as hybrid work and sustainability issues. This often leads to high-quality space, but at the same time to longer decision-making processes, so that large-scale lettings in the current phase are still slow in coming."

Vacancy rate increases due to sublet space
Office vacancy continued to rise and stood at 923,200 sq m at the end of Q2, bringing the vacancy rate to 9.9 percent. Compared to a year previously, available space has increased by almost 29 percent. In Q1 the vacancy rate mainly rose due to a significant increase in the number of subletting spaces on offer. Although this trend did not intensify further in Q2, the strong increase in subletting space remains the main driver of vacancy in a year-on-year comparison. Currently, 129,000 sq m of subletting space is available. 

In 2024-2026 many completions will come onto the market
So far in 2023, the level of office completions of in Düsseldorf has been extremely low at only around 8,500 sq m, which is almost 51,000 sq m less than a year ago. Currently, around 62,500 sq m of office space is scheduled for completion in 2023, which would bring the completion volume for the year as a whole to just under 71,000 sq m. However, a total of 395,000 sq m of office space is under construction at the end of Q2, of which 145,200 sq m alone will come onto the market in 2025. Overall, the pre-letting rate for development projects due for completion in 2023-2026 is around 36 percent, which is lower than the equivalent period a year earlier (just under 43 percent). 

Office rents stable at EUR 38.00/sq m per month
At the end of Q2 2023, the sustainably achievable prime office rent in Düsseldorf was EUR 38.00/sq m per month and is primarily achieved in the CBD submarket. Compared to the Q1, it remained stable, and compared Q2 of last year, prime rent has increased by EUR 8.00/sq m per month. Some of the development projects and refurbishments in the CBD area are primarily responsible for the above-average increase in rents. Prime office rents will remain at least at this level to the end of the year, according to Cushman & Wakefield's forecast

The weighted average rent is currently at a high EUR 20.35/sq m per month and has risen significantly, by 15 percent, over the past 12 months. In Q2 2022, the average rent was still EUR 17.75/sq m per month. Nevertheless, rental price momentum slowed in Q2 for the first time for quite some time. Compared to Q1 2023, the average rent has fallen by around 2 percent. The decline is primarily attributable to the low number of high-priced and large-scale lettings.