Cushman & Wakefield, one of the world's largest real estate consultancies, has analysed developments on the office markets in Berlin, Düsseldorf, Hamburg, Frankfurt and Munich for the fourth quarter and the full year 2024 and summarised the parameters of take-up, rents and supply below.
BERLIN
No turnaround yet on the Berlin office market in 2024
Dominic Rausch, Head of Office Agency Berlin at Cushman & Wakefield, comments: ‘For the second time in a row, take-up is well below the 10-year average, while the vacancy rate has almost doubled in the past two years. In view of this development, owners are more than ever required to focus on the needs and expectations of office users.’
Demand: Eight deals for over 10,000 m², three of which were owner-occupiers
- A total of 546,000 m² of office space was let or taken by owner-occupiers on the Berlin office property market in 2024. Take-up totalled around 463,000 m², with owner-occupiers accounting for around 83,000 m².
- At 149, the number of agreements signed in Q4 2024 was lower than in the previous quarter (163) and totalled 598 for the year. This means that 63 fewer agreements were signed than in the previous year, although take-up remained almost stable with an increase of around 2%.
- The largest deal in the 4th quarter was concluded by the consulting firm Deloitte with around 20,000 m² in Hackesches Quartier.
Rents: Average and prime rents remain constant, rental incentives increase
- The prime rent remained stable in the 4th quarter at €45.00/m² per month and has thus remained unchanged since the end of 2023.
- The area-weighted average rent was EUR 29.15/m² per month at the end of 2024, down only slightly on the end of 2023 (EUR 29.25/m²).
Supply: Around 8.8 per cent of all office space available at short notice
- The office space vacancy rate in Berlin has risen for the twelfth time in a row and stood at 1.87 million sqm at the end of the 4th quarter of 2024. This corresponds to a vacancy rate of 8.8 per cent. A year ago, it was still at 6.9 per cent.
- Around 171,000 m² or 9 per cent of the vacant space is sublet space. Companies in the information and communications sector in particular offer such space.
DÜSSELDORF
The Düsseldorf office lettings market lacked major deals
Martin Höfler, Head of Office Agency Düsseldorf at Cushman & Wakefield, comments: ‘The final quarter of 2024 was in line with the take-up results of the previous quarters. Nevertheless, the strong letting momentum and high number of active large-scale searches make us more optimistic about 2025. High-quality properties and space in prime locations will remain the key letting criteria for the majority of tenants.’
Demand: Take-up falls for the third year in a row
- Take-up in 2024 was around 223,000 m², 15 per cent below the previous year and a third below the 5-year average. Cushman & Wakefield expects take-up of 280,000 m² for 2025.
- A total of 380 contracts were signed (+6 per cent compared to the previous year). There were only two major deals of 5,000 m² or more in the year as a whole, compared to seven in the previous year. The three sub-markets with the highest take-up for the year as a whole were Kennedydamm, CBD and City, each with take-up of between 27,000 m² and 29,000 m².
- The largest deal in the 4th quarter was concluded by the City of Düsseldorf for around 4,800 m² at Immermannstrasse 51-53.
Rents: Prime rents have risen, while average rents have fallen
- The achievable prime rent rose to EUR 43.50/m² per month in the course of 2024 (+8.8 per cent). A further increase is expected for 2025, albeit at a lower growth rate.
- The weighted average rent is listed at EUR 19.00/m² per month at the end of 2024 and is below the level of the two previous years.
Supply: vacancy rate increases slightly
- Vacant office space rose only minimally to around 990,000 sqm over the course of the year. The vacancy rate at the end of 2024 was 10.5 per cent, only 0.1 percentage points higher than at the same time last year.
- The supply of sublet space has fallen over the past twelve months to currently 124,000 sqm.
FRANKFURT
Weak year-end result on the Frankfurt office lettings market
Hanjo Theiss, Head of Office Agency Frankfurt at Cushman & Wakefield, comments: ‘The year 2024 ended as the second weakest in the last five years after the coronavirus year 2020. A 5-year comparison shows a significant reduction in take-up and a shift within the size categories. We also see no signs of a return to take-up above the 400,000 m² mark in the coming year.’
Demand: lettings of 5,000 m² or more account for only a quarter of take-up
- Office space take-up from new lettings and owner-occupation on the Frankfurt property market totalled around 351,000 m² in 2024. Compared to the previous year, take-up fell by 3 per cent. The 5-year average was missed by 15 per cent and the 10-year average by 25 per cent.
- Take-up in the 4th quarter totalled 81,600 m² and was 7 per cent below the previous quarter (87,300 m²) and 12 per cent below the take-up in Q4 2023 (92,500 m²). Strabag Real Estate's letting of 10,000 m² in the ‘Seed’ project development in Frankfurt's Europaviertel is the largest letting in the final quarter of the year.
- The share of large deals in take-up has fallen sharply in recent years: While around 41 per cent of take-up was generated by 16 lettings in the 5,000 m² and above size category in 2019, this figure is just 24 per cent for 8 lettings in 2024.
Rental prices: Prime rent climbs to 49.00 euros/m²
- In the 4th quarter, the monthly prime rent was €49.00/m², an increase of €0.50 compared to the previous quarter and €1.00 compared to the previous year.
- The area-weighted average rent was EUR 26.10/m² per month. Compared to the 4th quarter of 2023, this corresponds to an increase of €2.40 (10.1 per cent). Compared to the previous quarter, it is therefore EUR 1.00 (4.0 per cent) higher.
Supply: vacancy rate at 10.2 per cent
- The office space vacancy rate will stabilise at 1.2 million m² by the end of 2024. This corresponds to an increase of 0.9 percentage points compared to the previous year. Cushman & Wakefield also anticipates a further increase in the vacancy rate over the course of 2025.
HAMBURG
Public sector dominates Hamburg office letting market
Pierre Nolte, Head of Offices & Leasing at Cushman & Wakefield in Germany, comments: ‘At 416,000 m², the Hamburg office lettings market recorded only a minimal decline compared to the previous year, which is a positive factor in the ongoing difficult market situation. In view of changing user requirements, we expect a moderate increase in market activity in 2025 and believe that take-up of 450,000 m² is possible.’
Demand: Five out of six large deals of 10,000 m² or more are accounted for by the public sector
- In 2024 as a whole, around 416,000 m² of office space was let or taken up by owner-occupiers - 5 per cent less than in the previous year. With the exception of 2020, which was dominated by Covid-19, this is the lowest annual result since 2009.
- The majority of the 496 deals (76) were concluded with consulting companies. However, the largest share of take-up (26 per cent) was secured by the public sector with 10 deals for around 108,000 m². The largest deal of the 4th quarter and also of the year was the acquisition of the HCOB headquarters on Gerhart-Hauptmann-Platz for own use by the City of Hamburg (25,600 m²).
Rents: Prime rent at all-time high - moderate increase expected in 2025
- The prime rent will reach a high of €35.00/m² per month by the end of 2024. Over the 12-month period, this corresponds to an increase of €1.00 or 3 per cent. The limited supply coupled with high demand for high-quality space in prime locations is likely to cause prime rents to continue to rise slightly in 2025.
- The weighted average rent of all agreements concluded in the past twelve months stands at EUR 21.20/m² per month. Compared to the previous year, this corresponds to a sideways movement.
Supply: the office vacancy rate continues to rise
- The vacancy rate increased by 0.9 percentage points year-on-year and stood at 5.5 per cent at the end of 2024. The absolute vacancy rate rose by 126,000 m² to around 776,000 m².
- The supply of sublet space available at short notice rose by 45 per cent over the course of the year: it stood at around 73,000 m² at the end of December 2024.
MUNICH
Munich office market with strong growth in take-up and rents
Matthias Hofmann, Head of Office Agency Munich and Head of the Munich office of Cushman & Wakefield, comments: ‘On the demand side, the market has recovered with a pleasing take-up of space. One special feature is the strong growth in prime rents. The persistently high demand for space within the Altstadtring is leading to deals in prime properties, some of which are well above the defined prime rent.’
Demand: take-up up up 29 per cent on the previous year
- Take-up will total around 605,000 m² in 2024 as a whole, significantly above the previous year's figure (+29 per cent), but still below the 5-year average (-7 per cent). Cushman & Wakefield expects a further slight increase in take-up for 2025 as a whole. There was also an increase in the number of transactions in 2024 compared to the previous year: around 690 transactions represent an increase of 11 per cent.
- The City Centre East (109,000 m²) and City Centre West (98,000 m²) submarkets recorded the highest take-up. The North Environs (78,000 m²) follows in third place. Industrial companies lead the sector statistics with 127,000 m².
- The largest take-up in the 4th quarter was accounted for by the Technical University of Munich, which rented around 19,300 m² in the Lab Campus at the airport.
Rents: Prime rents at a new record level
- Rents rose significantly over the course of the year. Prime rents increased by EUR 6.00/m² (+12.8 per cent) to EUR 53.00 per month.
- Average rents rose by around 5 per cent in the same period. Prime rents are expected to continue to rise in 2025, albeit no longer at such a dynamic growth rate.
Supply: sharp rise in the vacancy rate
- The vacancy rate rose significantly in 2024. The vacancy rate stood at 7.4 per cent at the end of 2024 (up 1.7 percentage points). This is due to the high number of completions (53 per cent vacant at the time of completion) and a reduction in space for new leases by companies. Cushman & Wakefield expects vacancy rates to continue to rise in 2025.
- In 2024, 234,000 m² of office space was completed (43 per cent below the previous year). A comparable level of completions is expected for 2025.
