City Survey
Q3 2025
Letting market
Strong momentum still absent – office letting market on a cautious growth path
Across Germany’s seven largest office letting markets total take-up reached approximately 2 m sqm during the first three quarters of the year representing an increase of around 5% yoy. However, market dynamics varied significantly by region. Frankfurt (+74%) recorded the strongest growth among the top 7 cities. Hamburg (+7%), Cologne (+3%), and Düsseldorf (+2%) also posted modest increases in take-up, while Munich (-7%), Berlin (-16%), and Stuttgart (-25%) experienced declines.
Overall, the top 7 office letting markets in Germany displayed a heterogeneous performance during the first nine months of the year. While some locations recorded notable increases compared to the previous year, the aggregate take-up volume remains close to the five-year average.
The large-scale lettings observed in the first half of the year continued in Q3, confirming that leases exceeding 5,000 sqm remain the key driver of market growth, with a yoy increase of 14%. A striking feature is the regional distribution. Frankfurt alone accounted for 17 large transactions, matching the combined total of Berlin and Munich, both of which are significantly larger markets. In addition, the 1,001 to 2,000 sqm size segment posted a yoy gain of 8%.
Office Space Take-up Top 7 in (m sqm)
Average Rents Top 7 (in €/sqm)
Source: Colliers
Private sector gaining market share
As in the previous year, the public sector remained the group with strongest demand, accounting for 298,000 sqm or 15% of total take-up. It was followed by the manufacturing sector with 14%, although demand in this segment was highly concentrated in specific regions. Munich and Hamburg alone accounted for roughly two-thirds of total take-up in this category. The consulting sector ranked third with 12% of total take-up. Significant growth was recorded in the banking and financial services sector, where large-scale transactions in the first half of the year drove a 63% increase to 219,000 sqm. The research and development sector also saw strong momentum, with take-up reaching 73,200 sqm, representing an increase of nearly 52% yoy.
Office markets caught between high space availability and declining completions
Vacancy rates across Germany’s top 7 office markets continue to rise, currently amounting to approximately 8.1 m sqm, or 8.3% of total stock (previous year: 7%). This brings overall space availability to its highest level since 2010, when it reached 8.7 m sqm. For the full year 2025, completions are expected to total around 1.6 m sqm, of which roughly 60% is pre-let. In subsequent years, however, the volume of new supply is projected to decline significantly. For 2026, around 1.2 m sqm are currently planned with a pre-letting rate of 43%, while in 2027, completions are expected to fall further to 820,000 sqm with a 45% pre-letting rate. The lowest level since 2018, when completions amounted to 840,000 sqm. In 2026 and 2027, Berlin alone accounted for approximately 780,000 sqm of new space, underscoring its central role in nationwide development activity. However, the capital’s pre-letting rate remains comparatively low at 35%. By contrast, Stuttgart and Cologne are expected to record the lowest completion volumes among the top 7 markets during the same period, with around 120,000 sqm each.
For occupiers, this means that proactive strategies are essential to secure attractive locations while mitigating risks such as long-term commitments to non-future-proof properties.
The ongoing “flight-to-quality” trend is intensifying pressure on older existing assets. In CBD locations, this has already resulted in a “war for quality.” Owners who fail to adapt their assets to evolving tenant requirements are increasingly exposed to the risk of rising vacancy levels.
Divergent rent development across the top 7 cities
Prime rents across Germany’s top 7 office markets remain consistently above last year’s levels, primarily driven by large-scale lettings in new developments and high-quality projects. Frankfurt stands out with an 8% increase to 52.00 €/sqm, while Munich (56.00 €/sqm) and Stuttgart (37.00 €/sqm) both recorded strong gains of 6%. Berlin (47.85 €/sqm) and Düsseldorf (45.00 €/sqm) each rose by 5%, and Hamburg (36.00 €/sqm) posted a 3% increase. By contrast, average rent developments paint a much more heterogeneous picture. Frankfurt saw the sharpest rise, up 22% to 30.00 €/sqm, marking the highest average rent among the top 7 cities. Cologne followed with a 12% increase to 21.30 €/sqm. Munich to 26.50 €/sqm (+5%) and Hamburg to 21.50 €/sqm (+4%) posted moderate growth. In contrast, Berlin experienced a 10% decline to 26.30 €/sqm, while Düsseldorf and Stuttgart each recorded 3% decreases to 20.10 €/sqm.
Outlook: Modest growth but no clear turning point yet
Q3 confirms the positive development, although growth is somewhat more moderate compared to the first half of the year. For 2025 as a whole, we expect take-up of 2.6 m sqm, which represents an increase compared to the previous year’s figure.
However, with the ifo Business Climate Index standing at 89 points in Q3 and GDP growth projected at +1.2% for 2026, the macroeconomic environment does not indicate a strong growth momentum. As a result, the market is likely to remain broadly stable, with a sideways movement expected in the coming year.
Key figures top 7 office letting markets (as of Q3)
| Berlin | Dusseldorf | Frankfurt | Hamburg | Cologne | Munich | Stuttgart | |
|---|---|---|---|---|---|---|---|
| Take-up 2025 (in sqm) | 365,700 | 156,000 | 465,400 | 311,500 | 160,000 | 410,500 | 110,000 |
| Take-up 2024 (in sqm) | 435,900 | 153,000 | 267,800 | 290,000 | 155,500 | 443,300 | 146,000 |
| Change yoy | -16% | +2% | +74% | +7% | +3% | -7% | -25% |
| Prime rent 2025 (in €/sqm) | 47.85 | 45.00 | 52.00 | 36.00 | 33.00 | 56.00 | 37.00 |
| Prime rent 2024 (in €/sqm) | 45.50 | 43.00 | 48.00 | 35.00 | 31.50 | 53.00 | 35,00 |
| Change yoy | +5% | +5% | +8% | +3% | +5% | +6% | +6% |
| Average rent 2025 (in €/sqm) | 26.30 | 20.10 | 30.00 | 21.50 | 21.30 | 26.50 | 20.10 |
| Average rent 2024 (in €/sqm) | 29.10 | 20.70 | 24.50 | 20.60 | 19.00 | 25.20 | 20.70 |
| Change yoy | -10% | -3% | +22% | +4% | +12% | +5% | -3% |
| Vacancy 2025 (in sqm) | 1,910,300 | 874,000 | 1,335,900 | 768,000 | 380,000 | 2,270,800 | 564,200 |
| Vacancy 2024 (in sqm) | 1,680,400 | 697,600 | 1,176,600 | 624,000 | 307,300 | 1,882,900 | 461,500 |
| Vacancy rate 2025 | 8.1% | 10.8% | 11.7% | 5.3% | 4.6% | 9.7% | 6.6% |
Source: Colliers
Industrial and logistics letting market on the road to recovery
The German industrial and logistics property market recorded a take-up of approximately 4.4 m sqm during the first nine months of 2025, continuing its growth trajectory. This represents an 8% increase yoy, although the five-year average was missed by 18%. Owner-occupiers accounted for 23% of total take-up. Logistics service providers were particularly active, contributing around 39% of total take-up nationwide, with an average lease size of 11,500 sqm per transaction. Notably, logistics providers and retail companies recorded a similar number of transactions, highlighting the balanced demand dynamics across sectors. Overall, new developments dominated total take-up with a 63% share, while existing properties led in terms of transaction volume, accounting for 59% of all leases signed.
The logistics real estate markets continue to benefit from a high supply of space, especially in peripheral locations, where there is still a high level of space availability in some cases. This is also due to the high share of new construction developments in take-up.
In contrast, the top 8 markets are dominated by lettings in existing buildings, as these markets are already highly developed and land availability is becoming increasingly scarce, leading to a more constrained development pipeline.
Top 8 markets significantly exceed the previous year’s level in terms of take-up
Germany’s top 8 industrial and logistics markets recorded a 14% increase in take-up over the past nine months compared with the same period last year, accounting for 39% of total national activity. Despite this strong performance, total take-up of 1.7 m sqm still came in 15% below the five-year average.
Six out of the top 8 markets exceeded last year’s results, while only Cologne and Stuttgart registered a decline in take-up. Frankfurt achieved the highest volume, with 350,300 sqm, representing 20% of the top 8 total, driven by several large-scale transactions. Hamburg posted the strongest yoy increase, up 56%, whereas Stuttgart, with 69,600 sqm, recorded not only the lowest take-up but also the sharpest annual decline at -27%.
Compared to the same period last year, there has been a noticeable uptick in large-scale transactions, particularly in core logistics regions such as Berlin, Leipzig, and Frankfurt, which have significantly contributed to the positive performance of the top 8 markets.
At the same time, demand in the big-box segment remains subdued compared to the boom years of 2020 and 2021. The most stable demand continues to be seen in the business park segment, which benefits from proximity to customers and flexible usage options. Additionally, occupiers from the leisure and events sector have become increasingly active again, often competing with traditional commercial users for well-located urban space and in some cases, willing to pay higher rents to secure suitable premises.
Around two-thirds of all transactions were recorded in the small-scale segment up to 3,000 sqm, although these accounted for only 19% of total take-up across the top 8 regions. Majority of large-scale deals occurred during the first half of the year. The largest lease in Q3 was concluded in the Frankfurt logistics region, where a logistics service provider took up approximately 35,000 sqm under a sublease agreement. In the Munich logistics region, retail company TTI leased around 29,700 sqm in Maisach to expand its local operations.
Logistics service providers not only maintained their position as the strongest occupier group nationwide, but also dominated within the top 8 regions, accounting for 36% of total take-up. Retail companies followed with a 26% share, while manufacturing firms contributed approximately 22% of overall take-up.
Logistics service providers have reaffirmed their leading position in the market, supported by several large-scale transactions. The market entry of Asian companies, particularly from the e-commerce sector, such as JD.com, is driving additional space demand from these new market players.
At the same time, established logistics providers are responding to changing market conditions by securing additional capacity, further stimulating demand. As a result, the e-commerce segment is experiencing renewed momentum, reflected in the fact that retail companies ranked first in terms of the number of transactions. Moreover, Asian companies are not only seeking large central distribution hubs but are also increasingly in need of smaller urban sites to prepare for or expand their last-mile operations. Meanwhile, manufacturing firms are currently leasing mainly smaller spaces, driven by higher capital expenditures in this segment amid economic uncertainty and limited long-term planning visibility.
Prime rent growth stabilizes at 3%
The top 8 logistics regions recorded an average yoy rental growth of 3% for prime rents and 5% for average rents. Munich achieved the highest prime rent at 10.00 €/sqm, while Düsseldorf posted the strongest growth, up 8% compared with the previous year. Across the top 8 markets, the average prime rent now stands at 8.20 €/sqm.
Since the end of 2024, rental growth rates across the top 8 markets have remained stable, and further increases are expected by year-end, driven by persistently high asking rents. This is particularly evident in new developments, where asking rents in some cases exceed current prime levels, with completions anticipated in Q4.
At the same time, generous incentive packages, typically around one month of rent-free period per lease year, continue to lower effective rents. Moreover, tenants are increasingly seeking shorter lease terms of three to five years. Overall, corporate decision-making remains cautious, yet additional momentum from the Asian e-commerce sector, spurred by ongoing trade tariffs, is expected to provide further stimulus. By the end of the year, total take-up is projected to increase, reaching up to 2.3 m sqm across the top 8 markets, slightly exceeding 2024 levels.
Key figures top 8 industrial & logistics letting market (as of Q3)
Top 8 | Berlin / Brandenburg | Dusseldorf | Frankfurt / Rhein-Main | Hamburg | Cologne | Leipzig | Munich | Stuttgart | |
|---|---|---|---|---|---|---|---|---|---|
| Take-up 2025 (in sqm) | 1,732,000 | 308,000 | 213,600 | 350,300 | 285,100 | 145,500 | 183,400 | 176,200 | 69,600 |
| Change yoy | +14% | +41% | +26% | +13% | +56% | -26% | +2% | +7% | -27% |
| Forecast take-up end of 2025 | |||||||||
| Number of deals 2025 | 387 | 57 | 49 | 70 | 79 | 32 | 19 | 43 | 38 |
| Average size per deal 2025 (in sqm) | 4,475 | 5,404 | 4,359 | 5,004 | 3,609 | 4,547 | 9,653 | 4,098 | 1,832 |
| Prime rent 2025 (in €/sqm) | 8.30 | 8.50 | 8.20 | 8.50 | 7.70 | 5.90 | 10.00 | 8.50 | |
| Prime rent forecast end of 2025 | |||||||||
| Average rent 2025 (in €/sqm) | 7.50 | 6.90 | 6.80 | 7.00 | 6.30 | 5.40 | 9.00 | 7.20 | |
| Average rent forecast end of 2025 |
Source: Colliers