The Düsseldorf office lettings market achieved take-up of around 113,000 m² in the first half of 2024, reports Cushman & Wakefield, one of the world’s largest real estate consultancies. Compared to the same period last year, this corresponds to an increase in take-up of 21 per cent. Letting activity continues to be dominated by small to medium-sized lettings. Large-scale deals continue to be rare.
Martin Höfler, Head of Office Agency Düsseldorf at Cushman & Wakefield, explains: “The Düsseldorf office market is showing stronger letting momentum again. However, there is still a lack of major deals that would ensure higher take-up results. Major tenants are once again focusing more intensively on letting issues and potential lease agreements will be reflected in take-up or portfolio extensions over the next 12 months. In view of the completion pipeline, attractive letting opportunities in very good locations in established office submarkets are also likely to emerge outside the sought-after CBD submarket.”
Take-up of space: no boost in take-up due to large lettings
- In addition to the increase in take-up, the number of leases signed in the first half of 2024 also rose significantly once again. With just under 200 contracts registered, around 30 more contracts were signed than in the previous year.
- However, the Düsseldorf office market continues to lack the large-scale deals above 5,000 m² that drive take-up, which is why take-up is still around 27 per cent below the 5-year average.
- Small-scale lettings of less than 1,000 m² are responsible for around 55 per cent of total take-up. This is almost 12,000 m² more than in the previous year.
- In the first half of the year, there were only two major deals above 5,000 m². In the 1st quarter, the international law firm Noerr LLP concluded a deal for around 6,000 m² in the “Le Coeur” project currently under construction at Königsallee 37 in the CBD submarket. In the 2nd quarter, Bau- und Liegenschaftsbetrieb NRW secured almost 6,900 m² of office space in the Infinity Office at Schwannstrasse 10 in the Kennedydamm submarket.
Rental prices: High property and location requirements of users drive price level for prime rents
- The sustainably achievable prime office rent in Düsseldorf was EUR 42.00/m² per month at the end of Q2 2024. Compared to the 2nd quarter of the previous year, this corresponds to an increase of EUR 4.00/m² (11 per cent). This is mainly due to a number of high-priced contracts concluded in the project developments currently under construction in the CBD. Compared to the 1st quarter of 2024, however, the prime rent remained unchanged.
- Demand for high-quality space in prime city centre locations remains high, while supply is limited. A trend reversal in terms of location and property quality is not expected in the future, which is why the prime rent is likely to remain at least at this level for the rest of the year.
- The weighted average rent is currently quoted at EUR 20.00/m² per month and has fallen slightly by around 2 per cent over the past twelve months.
Vacancy rate remains above the 10 per cent mark
- The office space vacancy rate at the end of Q2 2024 was around 940,000 m², corresponding to a vacancy rate of 10.1 per cent. Compared to the same period last year, the amount of available space has increased by 2 per cent.
- However, the vacancy rate has fallen slightly again since the previous high of 971,000 m² in the 4th quarter of 2023. This is primarily due to the declining supply of sublet space, which currently stands at 126,000 sqm.
- Net absorption remains negative year-on-year at -2,000 m², meaning that more office space has been vacated in the past 12 months than users have occupied or rented.
- A significant reduction in vacancies is not expected over the course of 2024. The reasons for this are not only the lower demand for office space due to desk sharing and a high completion pipeline, but also the more difficult marketing of older existing buildings - especially outside city centre locations.
Completions: Lots of office space under construction, but no easing of supply in the city centre
- Office space completed in Düsseldorf totalled 43,000 m² in the first half of 2024. In the 2nd quarter, the “Toniq2” office project for own use by AOK Rheinland in the North submarket was completed with 26,000 m².
- The construction volume (office space under construction) totalled 436,000 m² at the end of June 2024, another 41,000 m² more than in the same period of the previous year. Around 62% of the space is still available for rent at the current time. Only around 90,000 m² of the space under construction is in the highly sought-after CBD and City submarkets.
- In total, the construction projects that have been cancelled or are no longer likely to be continued in the near future amount to around 383,000 m².
