Cushman & Wakefield, one of the world's largest real estate consultancies, reports a total office space take-up of around 2.14 million square metres across the five key office locations in Germany (Berlin, Düsseldorf, Frankfurt, Hamburg, and Munich) for the full year of 2024. This represents a 4 per cent increase compared to the previous year, but 20 per cent less than the 5-year average.
Pierre Nolte, Head of Offices & Leasing at Cushman & Wakefield Germany, comments: ‘We are seeing significant differences between the individual markets in terms of increases or declines in leasing activity. In Düsseldorf, Hamburg, and Frankfurt , the results from the previous year were not reached, mainly due to a decline in deals over 5,000 square meters. Munich and Berlin scored with a higher number of deals over 10,000 square meters. For 2025, we expect more decisions from large occupiers in this segment, leading to a slight further market recovery.'
Helge Zahrnt, Head of Research & Insight Germany at Cushman & Wakefield, adds: ‘The office leasing market is caught in a vice between poor economic situation and a structural shift in demand due to hybrid office solutions. Both factors will persist in 2025. The expected economic growth will only show a slight positive balance, and despite an increase in back-to-office solutions, users will continue to reduce the size of their office spaces.”
Space take-up: Slightly above last year's period
- Compared to the previous year (Q1-4 2023), there has been a strong increase in space take-up in Munich (+29 per cent), stability in Berlin (+2 per cent), a slight decline in Frankfurt (-3 per cent) and Hamburg (-5 per cent) and a significant decline in Düsseldorf (-15 per cent).
- The 4th quarter has a space take-up of around 548,000 m², slightly above the average (+5 per cent) of the individual quarters since the beginning of 2023. This indicates stabilisation at a low level. For the full year 2025, a space take-up of 2.3 million m² is expected - an increase of 8 per cent compared to 2024.
- From Q1-4 2024, the number of deals remained stable at around 2,600 compared to the previous year. In terms of deal sizes, there has been an increase in transactions over of 10,000 m². A total of 23 such deals were completed (previous year: twelve), of which eight were in Berlin, seven in Munich, six in Hamburg, and two in Frankfurt. The largest deal in Q4 2024 with around 26,000 m², is the owner-occupier purchase of the HCOB headquarters on Gerhart-Hauptmann-Platz by the City of Hamburg.
Rents: Rent Levels Continue to Rise
- Apart from a period of stability in the first year of the pandemic, prime rents have consistently increased over the last ten years, continuing into 2024. On average, across the top 5 markets, prime rents have risen by 5.2 per cent. The strongest increase was in Munich (12.8 per cent or EUR 6/m³) to EUR 53. In Düsseldorf, the increase for the year was EUR 3.50 (8.8 per cent).
- Average rents continue to present a mixed picture, with growth in some cities (Frankfurt +2.45 EUR/m², Munich +1.25 EUR/m²), stability in others (Hamburg and Berlin), and a decline in Düsseldorf (-1.30 EUR/m²). On average, across the top five markets, the increase in average rents is 1.4 per cent compared to the same quarter last year.
Vacancy Rates: Further Increase
- The office space vacancy in the top 5 markets stood at 6.44 million m² at the end of Q4 2024. This corresponds to a vacancy rate of 8.2 per cent, which is 1.3 percentage points higher than twelve months ago. Among the top 5 markets, Hamburg continues to have the lowest vacancy rate at 5.5 per cent, while Düsseldorf has the highest at 10.5 per cent.
- The supply of sublet space increased to 642,000 m² in Q4 compared to the end of September.
- The vacancy rate is expected to rise further to around 8.8 per cent by the end of 2025. The main reasons for this are unleased space in upcoming completions, space reductions due to office relocations, and the weak economic climate, which is causing tenants to delay their relocation decisions.
Completions: High Volume of New Developments
- A total of around 1.2 million m² of office space was completed in the four quarters of 2024. 60 per cent of this was either leased or occupied by owner-occupiers at the time of completion. The largest volume of completions by far is in Berlin (650,000 m²), followed by Munich (234,000 m²).
- Around 1.4 million m² of new space will be made available to the market in 2025. In the following year, the figure is expected to decline further, and the 1 million m² mark is unlikely to be reached.
