City Survey
Q1 2025
Letting Market
Large-scale lettings shape the result of the office letting market at the start of the year
In the first quarter of 2025, around 712,400 square metres of office space were taken up in Germany’s seven largest office leasing markets. This exceeded the previous year’s result by around 18 percent.
take-up top 7 (+18% yoy)
The office market is starting 2025 with a significant quantitative recovery compared to the same quarter last year. The result shows that the market has stabilized and the biggest crisis phase has been passed.
However, the 18 percent improvement in earnings in the first quarter is largely attributable to the low level of the previous year. In addition, large-scale leases by Commerzbank and ING in Frankfurt and Siemens in Munich were largely responsible for the increase in demand. In view of the current GDP forecasts and leading indicators, it can be assumed that take-up in 2025 will improve slightly compared to the previous year but will remain 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 at the start of the year
With an increase of 1.3 percentage points compared to the same time last year to 7.7 percent, the vacancy rate at the start of 2025 is at its highest level since 2010. A further increase is expected in view of the still well-filled completion pipeline.
vacancy rate top 7
In 2025, 1.65 million square metres of office space is expected to be completed, 60 percent of which is currently already let or owner-occupied. A total of around 3.9 million square metres are under construction, more than a third of which are in Berlin alone. Project developers are still hesitant with regards to speculative construction starts. Due to any postponements of completion dates, it should be noted that a significant decline in the completion volume is to be expected from 2027 onwards.
Prime rents continue to rise
In a year-on-year comparison, prime rents in five of the top 7 locations increased again. Munich continues to lead the field with 54.00 euros per square metre, with an increase of 5 percent compared to the previous year. The same percentage increase was also observed in Berlin to 47.00 euros per square metre. In terms of average rents, the largest increases – largely influenced by individual major deals – were recorded in Frankfurt and Stuttgart at 12 percent each.
Recovery expected to continue
In the first quarter, there were 19 major leases with more than 5,000 square metres. The last time there were more deals in this segment was two and a half years ago. Here, too, the market’s slight recovery tendencies are evident.
The public sector was represented here seven times and continues to be an important pillar in the large-scale segment. But there is also more activity from the private sector.
Demand has stabilized at a moderate level for several quarters and the number of leases is roughly at the same level as in the same quarter of the previous year. The office market is currently caught between possible trade policy influences on the one hand and future economic stimulus measures by the German government on the other. The actual impact and the associated corporate decisions will only be assessed in the following quarters. We therefore expect take-up in the region of 2.7 million square metres for the top 7 in 2025, which would correspond to a slight increase of around 5 per cent compared to the previous year due to the major lettings.
Key figures top 7 office letting market
| Berlin | Dusseldorf | Frankfurt | Hamburg | Cologne | Munich | Stuttgart | |
|---|---|---|---|---|---|---|---|
| Take-up Q1 2025 in m² | 120,600 | 41,000 | 197,900 | 110,000 | 66,800 | 140,500 | 35,600 |
| Take-up Q1 2024 in m² | 140,600 | 54,000 | 94,900 | 80,100 | 31,500 | 141,000 | 59,200 |
| Change | -14% | -24% | +109% | +37% | +112% | ±0 % | -40% |
| Top rent Q1 2025 in €/m² | 47.50 | 43.00 | 50.00 | 36.00 | 33.00 | 54.00 | 37.00 |
| Prime rent Q1 2024 in €/m² | 44.70 | 42.00 | 48.00 | 34.50 | 34.00 | 51.50 | 35.00 |
| Change in % | +6% | +2% | +4% | +4% | -3% | +5% | +6% |
| Average rent Q1 Q1 2025 in €/m² | 27.70 | 19.50 | 28.00 | 20.80 | 21.30 | 26.20 | 21.40 |
| Average rent Q1 2024 in €/m² | 29.00 | 20.80 | 24.50 | 21.40 | 18.40 | 24.90 | 19.00 |
| Change | -4% | -6% | +14% | -3% | +16% | +5% | +13% |
| Vacancy Q1 2025 in m² | 1,820,100 | 775,300 | 1,306,600 | 675,000 | 340,500 | 2,141,300 | 502,000 |
| Vacancy Q1 2024 in m² | 1,445,800 | 664,000 | 1,121,800 | 588,000 | 274,600 | 1,687,800 | 412,400 |
| Vacancy rate Q1 2025 | 7.7% | 9.6% | 11.3% | 4.7% | 4.1% | 9.1% | 5.9% |
Data as of Q1 2025
Industrial and logistics real estate market exceeds previous year’s level
The German industrial and logistics real estate market generated take-up of around 1.3 million square metres in the first quarter of 2025. This corresponds to an increase of 3 percent compared to the previous year. Owner-occupiers accounted for around 15 per cent of take-up. It is noteworthy that in the first three months as many deals over 20,000 square metres were registered as in the whole of 2024 (17). Around 9 per cent of all deals were concluded in this area and were responsible for 43 per cent of take-up. In addition, these large-scale leases took place almost exclusively in the established logistics regions (including the top 8 markets). The focus of the users was on the markets in Hesse and North Rhine-Westphalia, where 63 percent of the major leases took place.
take-up in I&L (+3% yoy)
Positive result in the top 8 markets
In the first three months of 2025, the top 8 industrial and logistics real estate markets generated take-up of around 562,000 square metres, accounting for 45 per cent of total take-up in Germany. The result corresponds to an increase of 10 percent compared to the previous year and is 5 percent below the five-year average. The number of deals has also increased by 5 percent compared to the previous year.
This positive result indicates that the rental market is slowly recovering after the crisis years.
As early as the end of 2024, it could be observed that applications are becoming more concrete again. A slight increase in requests for space has also been registered in recent months. This trend will continue in 2025.
Especially in tight markets, it can be seen that high-quality logistics space continues to be let quickly. For example, the sublet space that came onto the market in Cologne last year was quickly absorbed by it. Most of the space vacated in Düsseldorf as a result of insolvencies in the textile industry has also been rented out again. On the other hand, Leipzig and Berlin continue to have high space availability. This makes it clear that the regional view is particularly important.
Compared to the previous year, five of the top 8 regions recorded an increase in take-up. Hamburg generated the highest take-up with 121,000 square metres. Thanks to a number of large-volume deals, Düsseldorf recorded the largest increase in take-up compared to the previous year (+145 per cent). Although Munich showed the largest decline in take-up in a 12-month comparison (-63 percent), rental take-up was exceeded by two-thirds.
The focus of the users was primarily on the small-scale space segment up to 3,000 square metres. Around 61 per cent of all deals were concluded in this area but were responsible for only 17 per cent of take-up. Compared to the previous year, more deals over 10,000 square metres were registered in the top 8 regions. The largest lease took place in the Düsseldorf logistics region, in Mönchengladbach, where Goodcang leased around 42,000 square metres of logistics space in its portfolio. The second largest deal and at the same time the largest owner-occupier settlement took place in Hamburg. The groundbreaking ceremony for a logistics hall of around 34,000 square metres was held there.
The strongest user group with a share of 30 percent of total take-up was formed by retail companies, followed by logistics service providers with 27 percent and the manufacturing industry with 23 percent.
Average rents are growing faster than prime rents
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. At 9.50 euros per square metre, Munich has the highest prime rent. Cologne was the only location to make a sideways movement in rents in the first quarter.
As is well known, the landlord market has turned into a tenants’ market. This trend will continue this year, with regional exceptions. Nevertheless, the number of properties designed to meet the needs of clients is limited. While nominal rents remain high, incentives ensure that effective rents are lower. For example, in the case of long-term leases, one rent-free month per contract year is no longer uncommon in most locations. Impulses from the e-commerce and battery storage sectors will contribute to the continuation of the revival in the rental market, so that take-up is expected to be slightly above the previous year’s level of 2.1 million square metres
prime rent growth top 8 yoy
It can be assumed that new trade relations will emerge due to the new tariff policy of the USA and that this will lead to a change in existing global supply chains.
In the past, it has already been observed how global crises have led to more storage capacities in Germany, for example.
Industrial and logistics leasing market data
| Top 8 | Berlin / Brandenburg | Dusseldorf | Frankfurt / Rhine-Main | Hamburg | Cologne | Leipzig | Munich | Stuttgart | |
|---|---|---|---|---|---|---|---|---|---|
| Take-up Q1 2025 in sqm | 561,600 | 85,200 | 99,300 | 118,200 | 121,000 | 34,700 | 50,200 | 28,500 | 24,500 |
| Change year- on-year in % | 10% | 57% | 145% | 44% | 64% | -54% | -41% | -63% | 8% |
| Leasing take-up Q1 2025 in sqm | 85,200 | 99,300 | 113,400 | 54,400 | 34,700 | 50,200 | 28,500 | 24,500 | |
| Change year- on-year in % | 57% | 165% | 38% | -20% | -47% | 121% | 66% | 8% | |
| Forecast for take-up end of year 2025 | |||||||||
| Number of deals | 122 | 15 | 15 | 20 | 28 | 10 | 8 | 11 | 15 |
| Average size per deal | 4,603 | 5,680 | 6,620 | 5,910 | 4,321 | 3,470 | 6,275 | 2,591 | 1,633 |
| Most important sector | Retailers | Production & Manufacturing | Logistics service providers | Retailers | Other users | Other users | Logistics service providers | Logistics service providers | Logistics service providers |
| Prime rent in EUR/sqm | 8,30 | 8,30 | 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 |
Data as of Q1 2025