City Survey
Q4 2024
Letting Market
Bottoming out – Slight recovery in the office letting market
In Germany’s seven largest office letting markets, take-up of 2.57 million square metres of office space was achieved in 2024, exceeding the previous year’s result by around 6 per cent. Munich with 28 percent and Stuttgart with 26 percent showed the most significant year-on-year increases, while declines were observed in Hamburg (-8 percent) and Düsseldorf (-17 percent).
take-up in the top 7 (+6% yoy)
Due to the ongoing economic weakness, companies are still holding back on new leases. A ray of hope is the clear increase in the large-area segment.
With a total of around 750,000 square metres in the top 7, deals with more than 5,000 square metres accounted for more than 40 per cent more take-up than in the previous year, although the number of deals hardly changed at 62. In view of the current GDP forecasts and leading indicators, however, it can be assumed that take-up for 2025 will continue to be below the 10-year average.
Office Space Take-up in the TOP 7 (in million sqm)
Average Rents in the TOP 7 in €/sqm
Vacancy rate with further increase in 2024
With an increase of 1.2 percentage points compared to the same time last year to 7.3 percent, the vacancy rate at the end of 2024 exceeded the 7 percent mark for the first time since 2013. As expected, new construction activity in 2024 was at a lower level than in previous years, with a completion volume of around 1.4 million square metres, 68 per cent of which had already been occupied by the end of the year. One reason for this is also insolvencies and postponements of project realizations, so that the pipeline for 2025 is more full again with around 1.8 million square meters with a current occupancy rate of 59 percent.
vacancy rate in the top 7
The combination of the continued weak demand in 2025 and the still relatively high completion figures will initially lead to a further increase in vacancy.
In the following years, the lower number of construction starts will have a noticeable impact on the completion figures. For 2025, a further increase in vacancies is expected in all top 7 locations, with the range in a city comparison of 4 percent in Cologne to over 10 percent in Frankfurt being quite large. In the course of 2026, however, according to our forecast, the peak will be reached.
Completions of Office Properties in the TOP 7 (in total in 1.000 sqm)
Forecast from 2024
Vacancy Rate in the TOP 7 in %
Prime rents continue to rise
In a year-on-year comparison, prime rents increased again in six of the top 7 locations. Munich continues to lead the field with 53.50 euros per square meter, with an increase of 11 percent compared to the previous year. Düsseldorf with +8 percent to 43.00 euros per square meter and Stuttgart with +6 percent to 37.00 euros per square meter were also significantly higher than in the previous year. In terms of average rents, the largest increases were seen in Stuttgart at 29 percent and 10 percent in Frankfurt.
For 2025, Colliers expects a further differentiation of rental prices according to space and location quality. Due to higher vacancy rates, many existing properties, especially in peripheral locations, will move sideways at best. Despite the rising vacancy rates, there is likely to be a renewed increase in prime rents, as demand in the high-quality space segment remains high, especially in central locations.
Public sector in 1st place with 18 percent of total sales
Weaker demand can be observed in almost all sectors. Among the sectors that usually generate the highest rental turnover, declines can be seen above all in the cyclical manufacturing sector (e.g. in the automotive sector), but also in the IT sector. Consulting companies are less affected, but they are also below the long-term average.
The public sector, which is not driven by the economy when it comes to leasing decisions, has contributed to the stabilisation of demand.
For example, the state capital Stuttgart in a refurbishment and the city of Cologne in a new construction project under construction each occupied around 26,000 square metres of office space. In 2025, the public sector is expected to conclude larger contracts again. Overall, however, Colliers does not expect take-up in 2025 to exceed the level of 2024.
Office leasing market data
| Berlin | Dusseldorf | Frankfurt | Hamburg | Cologne | Munich | Stuttgart | |
|---|---|---|---|---|---|---|---|
| Take-up 2024 in sqm | 582,800 | 204,000 | 355,200 | 418,000 | 206,000 | 606,200 | 197,200 |
| Take-up 2023 in sqm | 530,000 | 245,000 | 366,800 | 452,500 | 201,000 | 474,800 | 156,500 |
| Change in % | 10% | -17% | -3% | -8% | 2% | 28% | 26% |
| Prime Rent Q4 2024 in €/sqm | 46.50 | 43.00 | 49.00 | 35.00 | 31.50 | 53.50 | 37.00 |
| Prime Rent Q4 2023 in €/sqm | 44.50 | 40.00 | 47,00 | 34.50 | 34.00 | 48.00 | 35.00 |
| Change in % | 4% | 8% | 4% | 1% | -7% | 11% | 6% |
| Average Rent Q4 2024 in €/sqm | 29.10 | 20.00 | 25.00 | 20.20 | 19.70 | 25.10 | 22.30 |
| Average Rent Q4 2023 in €/sqm | 29.00 | 21.20 | 22.80 | 20.90 | 19.30 | 23.85 | 17.30 |
| Change in % | 0% | -6% | 10% | -3% | 2% | 5% | 29% |
| Vacant Space Q4 2024 in sqm | 1,721,800 | 744,500 | 1,233,900 | 640,000 | 313,500 | 2,043,700 | 493,600 |
| Vacant Space Q4 2023 in sqm | 1,288,700 | 647,000 | 1,109,600 | 523,300 | 239,800 | 1,594,700 | 432,200 |
| Vacancy Rate Q4 2024 in % | 7.3% | 9.3% | 10.7% | 4.4% | 3.8% | 8.7% | 5.8% |
Data as of Q4 2024
Industrial and logistics real estate market at previous year’s level
At the end of 2024, the German industrial and logistics real estate market generated take-up of around 5.7 million square metres and, with a decline of 5 per cent, is only slightly below the previous year’s level (2023: 6 million square metres). The share of owner-occupiers in the German market as a whole is around 24 percent and thus at the level of the last two years. The German top 8 industrial and logistics real estate markets accounted for a share of 38 percent with 2.1 million square meters. This result is on a par with the previous year, but falls short of the five-year average by 26 percent.
The fourth quarter was the strongest to date, not only nationally but also in the top 8 regions, which is a positive sign for the rental market.
take-up in I&L (+5% yoy)
The average size of space per lease has been rising again since the third quarter. This indicates that the uncertainties caused by the economic imbalance are slowly receding.
Although demand is still weakened, the applications are becoming more concrete again. For 2025, with a stabilization of the economy, it can be assumed that demand will also slowly recover.
Take-up characterised by small-scale lettings
Compared to the previous year, four of the top 8 industrial and logistics real estate markets recorded an increase in take-up. The highest take-up was generated in Frankfurt with 418,900 square metres. Cologne recorded the largest increase compared to the previous year with an increase of 56 percent. The lowest take-up and at the same time the largest decline in a 12-month comparison was recorded in Stuttgart with 125,500 square metres (-40 per cent).
The focus of the users was primarily on the small-scale space segment up to 3,000 square metres. Around 64 per cent of all deals were concluded in this sector, but were responsible for only 22 per cent of take-up in the top 8 regions. Deals of more than 5,000 square metres accounted for around 62 per cent of take-up at the end of the year. The largest deals of 2024 were three owner-occupier settlements in the logistics regions of Munich, Leipzig and Frankfurt with a total area of 131,000 square metres. It is remarkable that more leases over 20,000 square metres took place again. Apart from owner-occupiers, the largest deal in the fourth quarter took place in Düsseldorf, where an e-commerce company occupied a logistics hall of around 30,000 square metres in the new building. The second largest lease in the fourth quarter also took place in North Rhine-Westphalia in the Cologne logistics region and was made by Renault (27,300 square metres).
The strongest user group with a share of 31 percent of take-up was made up of retail companies, closely followed by the manufacturing industry with 28 percent and logistics service providers with 26 percent.
Demand is now relatively evenly distributed across all types of use. While logistics service providers were at the top of the user groups in the first quarter, they are now in last place. This is mainly due to the fact that the crisis is delayed in reaching them.
Due to lower export expectations, the industry will face further challenges in 2025, which is expected to have an impact on contract logistics companies. However, there could be positive impetus from the e-commerce sector.
Six of the top 8 regions with prime rents above 8 euros/square metre
The top 8 logistics regions recorded an average year-on-year rental growth of 3 percent for prime rents and 5 percent for average rents. Munich has the highest prime rent at 9.80 euros per square metre and Hamburg has the highest rent growth at 6 per cent (8.50 euros/square metre) compared to the previous year. Prime rents in the Cologne and Leipzig regions, on the other hand, have remained stable over the last 12 months (7.70 euros/square metre and 5.80 euros/square metre respectively).
The drop in demand as a result of economic uncertainties combined with the increase in supply in some cases has led to prime rents in Cologne and Leipzig stabilising, while in Munich and Hamburg they continue to rise due to tight markets and low vacancy rates. Overall, rising rents are only expected in individual top regions in 2025. Rental growth potential arises primarily from the fact that asking rents for speculative and completed new developments remain high, as land was purchased at high prices in the past and projects were realised in the phase of high construction prices. For example, no new prime rents are expected to be seen in the top markets of Berlin and Leipzig, as some space has to be absorbed due to the large supply of space and demand has to pick up. Landlords and tenants meet on an equal footing in almost all markets, so that a healthy amount of incentives and medium to long-term contract terms will also be found for 2025.
prime rental growth in the top 8 yoy
Industrial and logistics leasing market data
| Top 8 | Berlin / Brandenburg | Dusseldorf | Frankfurt / Rhine-Main | Hamburg | Cologne | Leipzig | Munich | Stuttgart | |
|---|---|---|---|---|---|---|---|---|---|
| Take-up 2024 in sqm | 2,132,700 | 272,300 | 293,700 | 418,900 | 269,100 | 277,200 | 279,300 | 196,700 | 125,500 |
| Change year- on-year in % | -1% | -25% | 25% | -4% | -12% | 56% | 2% | 30% | -40% |
| Leasing take- 2024 in sqm | 1,760,500 | 256,000 | 256,700 | 357,900 | 241,600 | 256,800 | 143,300 | 136,700 | 111,500 |
| Change year- on-year in % | -9% | -27% | 22% | -14% | 2% | 52% | -40% | -9% | -32% |
| Forecast for take-up end of year 2025 | |||||||||
| Number of deals | 539 | 88 | 66 | 98 | 91 | 60 | 36 | 58 | 42 |
| Average size per deal | 3,957 | 3,094 | 4,450 | 4,274 | 2,957 | 4,620 | 7,758 | 3,391 | 2,988 |
| Most important sector | Retailers | Retailers | Retailers | Logistics service providers | Logistics service providers | Retailers | Production & Manufacturing | Production & Manufacturing | Production & Manufacturing |
| Prime rent in EUR/sqm | 8.30 | 8.00 | 8.20 | 8.50 | 7.70 | 5.80 | 9.80 | 8.50 | |
| Forecast end of year 2025 | |||||||||
| Average rent in EUR/sqm | 7.50 | 6.90 | 6.80 | 7.00 | 6.30 | 5.30 | 8.90 | 7.20 | |
| Forecast end of year 2025 |
Data as of Q4 2024