Cushman & Wakefield, a global real estate consulting firm, recorded office space transactions of approximately 593,000 m² in the first quarter of 2025 across Germany's five major office markets (Berlin, Düsseldorf, Frankfurt, Hamburg, and Munich). This represents a 16% increase compared to the same period last year and is 5% above the 5-year average for the first quarters.
Tina Reuter, CEO Germany at Cushman & Wakefield, comments: "User sentiment is facing significant challenges: Geopolitical uncertainties continue to pose considerable risks. The rising U.S. tariffs have the potential to spark a trade war, putting additional pressure on certain industries. The new federal government's debt package, which includes investments in defense and infrastructure, could have a positive effect on the economy. Recent economic sentiment indicators showed cautious optimism, at least before the U.S. tariff sanctions. However, the global economic situation remains challenging and highly volatile."
Pierre Nolte, Head of Offices & Leasing Germany at Cushman & Wakefield, adds: "We are seeing significant differences in decision-making capabilities across industries. This directly affects the office markets in Germany, which vary in their reliance on different user groups. Additionally, global political and economic uncertainty is making users more cautious about long-term commitments. The focus on flexibility and cost efficiency has become even more pronounced."
Office Space Take-Up: Strongest Quarter Since Mid-2022
The leasing results within the Top-5 markets vary greatly:
In Frankfurt, the transaction volume for the beginning of the year more than doubled (+107%), placing the city firmly in first place. Hamburg also saw an uptick in transactions (+38%), while Munich remained stable (-1%), and Berlin (-20%) and Düsseldorf (-35%) recorded declines. A total space take-up of 2.3 million m² is expected for 2025, which would represent an 8% increase over 2024. • The number of transactions has also decreased. Around 570 deals mark the lowest value in the past ten quarters. The number of large deals (10,000 m² and above) remained stable. Three deals exceeding 30,000 m² increased their share of the total volume to a relatively high 30%. Among these is the lease by Commerzbank in the Frankfurt skyscraper development "Central Business Tower" for 73,000 m², the largest deal in the Top-5 markets since mid-2022 and in Frankfurt since 2010. Banks and financial services (135,000 m²) hold the top position in the industry ranking, ahead of industrial companies (114,000 m²).
Rental Prices: Prime Rents Continue to Rise
With the exception of Berlin and Düsseldorf, prime rents have continued to rise during the quarter, increasing by an average of 1% across the Top-5 markets. Compared to the same quarter last year, the increase was even 3.7%. Düsseldorf and Munich saw the strongest increases, ranging between 8 and 9%. Further increases are expected in the coming years.
Average rents across the Top-5 markets rose by 2.2% compared to the previous year. However, there are significant differences among the markets. For example, Düsseldorf saw a decline of 10%, while Frankfurt experienced an increase of nearly 20% due to high-end transactions.
Vacancy Rate: Further Increase
- The office vacancy rate in the Top-5 markets continues to grow, reaching 6.7 million m² by the end of Q1 2025. This represents a vacancy rate of 8.6%, an increase of 1.4 percentage points compared to 12 months ago. Among the Top-5 markets, Hamburg still has the lowest vacancy rate at 5.8%, while Frankfurt has surpassed Düsseldorf, now holding the highest vacancy rate at 10.8%.
- The availability of subletting space remained stable at around 630,000 m² by the end of Q1.
- By the end of 2025, a further increase in the vacancy rate to nearly 9% is expected. This is due to unleased spaces in anticipated completions, space reductions due to relocations, and the weak economic situation, which is causing users to delay their relocation decisions.
Completions: Volume Declines
- In Q1 2025, 224,000 m² of office space was completed. This marks a decline compared to previous quarters and is about one-third lower than the average of the last ten quarters. Almost three-quarters of the completed spaces were either leased or occupied by the end user at the time of completion. Berlin (84,000 m²) and Munich (72,000 m²) together accounted for 70% of the completion volume.
- As of the end of March 2025, around 2.8 million m² of office space was under construction in the Top-5 markets, with about half of this still available. Construction volume has been steadily decreasing since the beginning of 2023. For the entire year of 2025, 1.2 million m² of completions are expected, and for 2026, the expected completion volume is projected to be under 1 million m².
