City Survey
Q2 2025
Letting Market
Office market shows a differentiated picture in mid-2025: high vacancy rate meets rising letting volume
In the first half of the year, take-up of around 1.38 million sqm was achieved in Germany’s seven largest office letting markets. This means that the result is about 13 % above the previous year’s figure. However, the developments differ by region: Frankfurt (+92 %) and Cologne (+89 %) were able to almost double their previous year’s results, while Hamburg also increased by +10 %. In Dusseldorf and Stuttgart, take-up remained largely stable, while Munich (-13 %) and Berlin (-13 %) recorded declines.
take-up in the top 7 (+13% YoY)
In a long-term comparison, the office letting market has reached stability: although the half-year result is still around 11 % below the ten-year average, it slightly exceeds the five-year average, thus sending an initial positive signal.
This development was mainly driven by a high number of large-scale deals: 38 contracts above 5,000 sqm represent a 47 % increase in take-up in this segment compared to the previous year. It is noteworthy that nine of the ten largest deals are in project developments. This underscores the continued importance of high-quality new developments and highlights that flight-to-quality remains a major trend in the market.
Office Space Take-up in the TOP 7 (in million sqm)
Average Rents in the TOP 7 in €/sqm
Source: Colliers
Public sector remains an anchor – private sector becomes more active
As in the previous year, the public sector continues to serve as a key pillar of the office leasing market, currently accounting for 16 % of total take-up. At the same time, there is renewed momentum in the private sector: the manufacturing industry ranks second with a 14 % share, followed by consulting firms and the banking and financial sector, each contributing 13 % to total take-up. In the latter segment, Frankfurt reaffirms its status as a leading financial hub, accounting for approximately 122,700 sqm, accounting for around 70 % of the financial sector’s take-up.
Rising vacancy, decreasing development pipeline
The vacancy rate in the top 7 office markets continues to rise and currently stands at around 7.9 million sqm, which corresponds to a vacancy rate of 8.1 %(previous year: 6.7 %). This continues the anticipated trend of rising space availability: since 2019, the volume of vacant space has nearly tripled (2019: 2.7 million sqm or 2.9 %). For 2025, completions are expected to total around 1.63 million sqm, of which 62 % is currently pre-let or owner-occupied. In the two following years, the volume will fall noticeably to approx. 1.18 million sqm (2026) and 661,000 sqm (2027). The pre-letting rate stands at 39 % on average with clear regional differences: while even larger volumes of new buildings are coming onto the market in Berlin, for example, the supply in other cities remains more limited.
Most large-scale leases are currently tied to project developments and therefore do not absorb vacant existing space. At the same time, new construction projects are coming to market without being fully pre-let, resulting in portions of these spaces becoming available as vacancy. Combined with significant relocations from existing buildings in several of the top seven markets, this dynamic is expected to further increase vacancy in the short term. This development continues to pose a major challenge for owners of older properties, which often no longer meet current user requirements. They must future-proof their assets and adapt them to evolving demand patterns.
vacancy rate in the top 7
Prime rents rise in all cities
Prime rents in all top 7 cities continue to rise compared to the previous year – driven by the continued high demand for high-quality, modern space.
The strongest growth was recorded in Frankfurt and Munich, each with +8 % to €52.00 and €55.50 per sqm respectively. Berlin, Stuttgart and Cologne are also up 5 to 6 %. Average rents, on the other hand, are developing differently: In Frankfurt (+18 %) and Cologne (+17 %), large-scale contracts are causing significant increases. In Munich, Stuttgart and Hamburg, the average values are rising moderately, while declines of 6 % are recorded in Berlin and Dusseldorf each.
Upward trend with further potential
Even though there are significant regional differences, the half-year result is generally in line with expectations and signals a positive trend in terms of take-up and rent development. We are seeing a renewed trend of large occupiers signing leases and securing locations with the best site conditions.
In addition, other large-scale searches are active on the market. We therefore maintain our forecast of achieving a total take-up of around 2.7 million sqm for the full year 2025 – which would mark the strongest result since 2022. However, for this trend to continue, economic stimulus will be necessary. Should the German government’s planned measures take effect and generate the expected growth momentum, we anticipate further increases in leasing activity next year, along with a slowdown in the pace of rising vacancy rates across the office leasing markets.
Key figures top 7 office letting market
| Berlin | Dusseldorf | Frankfurt | Hamburg | Cologne | Munich | Stuttgart | |
|---|---|---|---|---|---|---|---|
| Take-up H1 2025 in m² | 256,300 | 103,000 | 354,000 | 215,000 | 107,000 | 258,800 | 90,200 |
| Take-up H1 2024 in m² | 295,600 | 105,000 | 184,400 | 195,200 | 56,500 | 296,100 | 95,500 |
| Change | -13% | -2% | +92% | +10% | +89% | -13% | -6% |
| Top rent Q2 2025 in €/m² | 47.50 | 43.00 | 52.00 | 36.00 | 33.00 | 55.50 | 37.00 |
| Prime rent Q2 2024 in €/m² | 44.70 | 42.00 | 48.00 | 35.00 | 31.50 | 51.50 | 35.00 |
| Change | +6% | +2% | +8% | +3% | +5% | +8% | +6% |
| Average rent Q2 2025 in €/m² | 27.00 | 19.40 | 29.00 | 21.30 | 21.70 | 26.55 | 21.10 |
| Average rent Q2 2024 in €/m² | 28.70 | 20.70 | 24.50 | 20.20 | 18.60 | 24.00 | 19.20 |
| Change | -6% | -6% | +18% | +5% | +17% | +11% | +10% |
| Vacancy Q2 2025 in m² | 1,859,900 | 837,900 | 1,332,900 | 722,000 | 340,500 | 2,251,200 | 543,900 |
| Vacancy Q2 2024 in m² | 1,560,600 | 678,000 | 1,133,500 | 604,000 | 304,700 | 1,758,900 | 455,200 |
| Vacancy rate Q2 2025 | 7.8% | 10.4% | 11.6% | 5.0% | 4.1% | 9.6% | 6.4% |
Source: Colliers, Data as of Q2 2025
Industrial and logistics real estate market with positive half-year result
The German industrial and logistics real estate market generated take-up of around 2.9 million sqm in the first half of 2025. This corresponds to an increase of 12 % compared to the previous year. Around 56 % of take-up was achieved in the second quarter. The distribution of deals differs regionally, but in total, more than half of the deals took place in existing properties (57 %). Smaller units of up to 3,000 sqm were primarily leased in existing buildings (72 %), whereas deals exceeding 10,000 sqm took place predominantly in new developments (also 72 %).
of take-up in I&L (+12% YoY)
Top 8 markets exceed previous year’s level
The top 8 industrial and logistics real estate markets accounted for 43 % of total take-up in Germany and achieved take-up of around 1.3 million sqm in the first half of 2025. The result corresponds to an increase of 31 % compared to the same period last year and is only 3 % below the five-year average.
The overall positive result on the rental market is primarily driven by the significantly higher momentum in the second quarter.
At the same time, the number of deals in the first half of 2025 remained almost the same compared to the same period last year (H1 25: 256 vs. H1 24:257). As a result, more deals have taken place in the large-scale segment again. The average size per deal stands currently at around 4,900 sqm. Even though demand and the willingness of entrepreneurs to make decisions are still somewhat subdued overall, we see that inquiries are rising slightly again in both the light industrial and big box sectors.
Five of the top 8 regions recorded an increase in take-up compared to the previous year, thanks to several large-volume deals. Frankfurt achieved the highest take-up with 279,900 sqm and contributed 22 % to the overall result of the top 8 markets. Thanks to a large owner-occupier deal in the second quarter, the Berlin market recorded the strongest year-on-year increase in take-up (+95 %). Although Munich showed the most noticeable decline in overall take-up (-46 %), letting volume (take-up excluding owner-occupation) was exceeded by 26 %.
As in previous quarters, user demand continued to focus primarily on the 1,000 to 3,000 sqm- segment. Around one third of all leases were signed in this range, although these accounted for only 12 % of total take-up. Although deals above 10,000 sqm accounted for only 11 % of all deals, they were responsible for almost half of the take-up by sqm. Notably, large-volume deals in Berlin and Leipzig were exclusively concluded in the new-build segment. This is primarily due to the strong availability of modern space in these regions. The largest deal took place in the Berlin logistics region, where discount retailer Netto is developing a logistics facility of approximately 60,000 sqm for its own use in Kremmen. The largest lease was recorded in the Leipzig logistics region, where a logistics service provider rented 50,000 sqm in a logistics facility currently under construction.
The strongest user group in the first half of 2025 was logistics service providers with a share of 40 % of total take-up, followed by retail companies with 26 % and the manufacturing industry with 19 %.
Each quarter, we observe a close race between retail companies and logistics service providers, both of whom seek similar types of properties. Several regions feature attractive development projects that appeal to both user groups.
In recent months, logistics service providers have secured a greater number of large-volume leases. By the end of the year, however, retail companies are expected to regain market share. Currently, there is a noticeable increase in demand from Asian companies, particularly in the e-commerce sector. This is likely to have a significant impact on leasing activity through the end of the year.
Average rents are growing faster than prime rents
The top 8 logistics regions recorded an average year-on-year rent growth of 3 % for prime rents and 5 % for average rents. At €9.80 per sqm, Munich continues to have the highest prime rent. In second place are the locations Dusseldorf, Hamburg and Stuttgart, which are among the second most expensive locations at €8.50 per sqm. The rental growth of 8 % in Dusseldorf suggests that the city is on track to outperform other locations by the end of the year.
prime rent growth in the top 8 compared to the previous year
Rental growth across all top 8 locations has slowed down in the last two years. Since the fourth quarter of 2024, however, rent growth has stabilized at an average of 3 % for prime rents and 5 % for average rents.
Due to attractive incentive packages such as rent-free periods of up to one month per lease year effective rents are overall lower. Economic uncertainty has led to reduced planning reliability for logistics service providers and manufacturing companies, resulting in growing demand for short- to medium-term lease agreements. Locations such as Dusseldorf and Frankfurt are expected to continue showing rental growth potential in the coming months, driven by persistently high asking rents. In contrast, regions like Berlin and Leipzig will first need to absorb a portion of the abundant available space before further rental growth can occur. This underscores the importance of a regional perspective.
Industrial and logistics leasing market data
| Top 8 | Berlin / Brandenburg | Dusseldorf | Frankfurt / Rhine-Main | Hamburg | Cologne | Leipzig | Munich | Stuttgart | |
|---|---|---|---|---|---|---|---|---|---|
| Take-up H1 2025 in sqm | 1,256,000 | 216,700 | 161,800 | 279,900 | 228,600 | 89,000 | 187,100 | 56,200 | 45,400 |
| Change year- on-year in % | 31% | 95% | 86% | 41% | 59% | -36% | 65% | -46% | -29% |
| Forecast for take-up end of year 2025 | |||||||||
| Number of deals | 256 | 34 | 29 | 50 | 57 | 20 | 15 | 26 | 25 |
| Average size per deal | 4,906 | 6,374 | 5,579 | 5,598 | 4,011 | 4,450 | 11,837 | 2,162 | 1,816 |
| Prime rent in EUR/sqm | 8.30 | 8.50 | 8.20 | 8.50 | 7.70 | 5.90 | 9.80 | 8.50 | |
| Forecast end of year 2025 | |||||||||
| Average rent in EUR/sqm | 7.50 | 6.90 | 6.80 | 7.00 | 6.30 | 5.40 | 8.90 | 7.20 | |
| Forecast end of year 2025 |
Source: Colliers, Data as of Q2 2025