City Survey
Q1 2026
Letting market
A subdued start to the year – the office market caught between uncertainty and a focus on quality
In the seven largest office letting markets in Germany, around 613,500 sqm of office space was let in the first quarter of 2026. Whilst Berlin and Munich recorded growth, the overall result was characterized in particular by a significant decline in Frankfurt. Compared with the same quarter last year this represents a fall of 14%. At the same time the figure is around 19% below the average start to the year over the past ten years. The number of lettings, however, remained at the same level as the previous year.
The start of the year shows that the office lettings market continues to operate in a challenging environment.
It is not so much the number of deals as their size distribution that is significant. Whilst large-scale lettings remain stable, there is marked reluctance, particularly in the mid-sized segment.
Office Space Take-up
Top 7 (in m sqm)
Average Rents Top 7
(in €/sqm)
Source: Colliers
Mixed trends across the top 7 markets
Three of the top 7 locations saw an increase in take-up compared to the same quarter of the previous year. These are Berlin (+28%), Munich (+17%) and Düsseldorf (+12%). In the remaining markets, letting activity declined, most notably in Frankfurt (-66%). Although this trend was to be expected given the exceptional circumstances in the same quarter of the previous year, which saw several unusually large-scale lettings, the decline was more pronounced than anticipated. Cologne also recorded a significant drop of 28%, which is primarily attributable to a lack of suitable space for large-scale tenants.
IT industry sector takes the lead
With a share of around 20% and a take-up of approximately 120,000 sqm, the IT sector was the largest user group in the first quarter of 2026. This was driven by several large-scale deals, including the quarter’s largest, signed by JetBrains in Munich. Overall, three of the ten largest deals were accounted for by IT companies in Munich, Berlin and Hamburg. The manufacturing sector accounted for around 16%, driven by several major deals in Munich and another in Berlin. The public sector remained cautious at the start of the year but is likely to re-emerge as a stronger driver of demand later in the year based on currently known requests.
Despite a challenging environment, the IT sector continues to confirm its role as a structurally robust segment within the office lettings market. This is also consistent with current industry sentiment, which, however, also shows that sentiment in many other sectors has recently deteriorated further, particularly among medium-sized companies. This caution is also reflected in the current weak demand in the mid-sized space segment. Additional geopolitical uncertainties will further exacerbate this trend and have a dampening effect on letting activity.
Large deals stable – mid-market segment significantly weakened
With 20 deals exceeding 5,000 sqm, the number of large-scale leases was slightly higher than in the previous year and exactly in line with the five-year average. However, the resulting total space was lower, as – unlike in the same quarter of the previous year – no leases exceeding 30,000 sqm were recorded. The three largest deals of the quarter were each just over 20,000 sqm, two of which were in Munich and one in Frankfurt.
The 2,000 – 5,000 sqm segment performed significantly weaker. With just 24 deals, this segment recorded its lowest figure since 2010. Compared with the previous year (41 deals) and the five-year average (48 deals), this represents a significant decline across all seven leading locations. This segment, which traditionally shapes the market, is currently under pressure. On the one hand, companies in this size bracket often react at short notice to current economic and geopolitical developments and postpone their leasing decisions accordingly. On the other hand, the supply situation is exacerbating the situation.
The ongoing flight-to-quality means that high-quality project developments are often snapped up entirely by large-scale tenants.
As a result, there are increasingly fewer suitable and economically viable premises available for users in the mid-market segment.
Vacancy rates continue to rise – momentum in new construction varies by region
The office vacancy rate has risen steadily since its low point in 2019 and currently stands at around 8.7% corresponding to a rate of 8.9%. This means that the volume of vacant space is at a similar level to that of 2010. The proportion of sublet space currently stands at around 650,000 sqm, or seven per cent of the total vacancy. This is around 70,000 sqm below the previous year’s level, a decline largely attributable to successful subletting in Berlin over the past twelve months.
In the course of the year, a further moderate increase in vacancy rates is expected across all locations.
This is attributable both to subdued demand and to space savings resulting from consolidation and efficiency improvements in leasing. At the same time, there are regional differences. Whilst significant amounts of newly built space are coming onto the market, particularly in Berlin and Munich, supply remains considerably more limited in the other top 7 markets. The rise in vacancy rates is expected to slow considerably from 2027 onwards, as the project pipeline is shrinking significantly and, consequently, letting in high-quality existing properties become increasingly important.
Rental price trends are stable in top segments, whilst average rents are effected selectively
Prime rents rose in the first quarter of 2026 compared to the same quarter of the previous year in five of the seven top markets and were in some cases significantly above the inflation rate. The driver of this remains the continuing high demand for modern, high-quality office space in central locations. Particularly noteworthy is Munich with an increase of 14%, which exceeded the 60.00 €/sqm mark for the first time. This underlines the high price pressure in the premium segment.
Outside the premium segment, rents are remaining stable in many areas, which also affects average rents depending on the mix of tenancies.
Consequently, trends in the top 7 markets were mixed. In Stuttgart, the average rent fell by 14%, primarily due to a lower proportion of high-value leases over the past twelve months. In previous years, large-scale leases by the public sector in high-value new-build and existing properties, not least due to their role as a model for sustainability, had caused the average rent to rise at an above-average rate. The decline in these deals is now having a correspondingly dampening effect. In the remaining top 7 markets, the average rent remained largely stable, with isolated moderate fluctuations upwards or downwards. Düsseldorf recorded the strongest year-on-year increase, up by 8%, driven by several medium-sized deals above 25.00 €/sqm.
Outlook: Caution and focus on quality remain key
The economic outlook remains challenging. Additional geopolitical uncertainties have recently led to a further downward revision of GDP forecasts. The medium-term outlook for the office lettings markets therefore continues to depend largely on geopolitical developments.
For 2026, take-up is currently expected to be at the previous year’s level of around 2.6 m sqm.
The market continues to be characterized by a selective approach to space and a clear focus on the quality, location and future viability of properties. The key factor will be how quickly companies regain sufficient planning certainty and return to active leasing processes.
Key figures top 7 office letting markets (as of Q1)
| Berlin | Dusseldorf | Frankfurt | Hamburg | Cologne | Munich | Stuttgart | |
|---|---|---|---|---|---|---|---|
| Take-up Q1 2026 (in sqm) | 153,800 | 46,000 | 67,200 | 101,500 | 48,000 | 164,400 | 32,700 |
| Take-up Q1 2025 (in sqm) | 120,600 | 41,000 | 197,900 | 110,000 | 66,800 | 140,500 | 35,600 |
| Change yoy | +28% | -12% | -66% | -8% | -28% | +17% | -8% |
| Prime rent Q1 2026 (in €/sqm) | 49.40 | 45.00 | 54.00 | 38.00 | 33.00 | 61.50 | 37.00 |
| Prime rent Q1 2025 (in €/sqm) | 47.50 | 43.00 | 50.00 | 36.00 | 33.00 | 54.00 | 37.00 |
| Change yoy | +4% | +5% | +8% | +6% | ±0% | +14% | ±0% |
| Average rent Q1 2026 (in €/sqm) | 27.50 | 21.00 | 29.00 | 21.30 | 20.00 | 26.50 | 18.30 |
| Average rent Q1 2025 (in €/sqm) | 27.70 | 19.50 | 28.00 | 20.80 | 21.30 | 26.20 | 21.40 |
| Change yoy | -1% | +8% | +4% | -2% | -6% | +1% | -14% |
| Vacancy Q1 2026 (in sqm) | 2,216.800 | 880,000 | 1,444,400 | 850,000 | 430,000 | 2,331,300 | 581,000 |
| Vacancy Q1 2025 (in sqm) | 1,820,100 | 775,300 | 1,306,600 | 675,000 | 340,500 | 2,141,300 | 502,000 |
| Vacancy rate Q1 2026 | 9.3% | 10.7% | 12.5% | 5.8% | 5.2% | 10.0% | 6.7% |
Source: Colliers
More activity in the German industrial and logistics letting market
The German industrial and logistics property market recorded a take-up of 1.5 m sqm in the first three months of 2026. This represents an increase of 19% compared with the same period last year. The five-year average was missed by 9%. This is primarily due to the above-average take-up during the boom years of 2021 and 2022. The first quarter of 2026 was the strongest first quarter since 2022. Compared with the previous year, there were again more deals exceeding 50,000 sqm (6 compared with 2 in the first quarter of 2025), which had a positive impact on the leasing market.
One of the most significant trends already evident in 2025 was the growing presence of Asian users in the German logistics property market.
Their share of take-up rose to 15% in the first quarter of 2026. For 2025, the figure was 10%, and over the past five years the average was just 5%. Having leased premises primarily in North Rhine-Westphalia last year due to existing networks, these companies are now looking for space across Germany. They have also established a presence in regions including Frankfurt and Stuttgart. These include companies from both the e-commerce and automotive sectors.
Top 8 markets at previous year’s level
At the end of the first quarter of 2026, the top 8 markets achieved take-up of 558,000 sqm and accounted for 37% of total take-up in Germany. This is slightly below the average share of the past five years of 40%. However, take-up, at the previous year’s level (-1%), fell short of the five-year average by 10%.
Among the top 8 logistics regions, Hamburg recorded the highest take-up at 108,100 sqm, thanks to a large-scale deal involving a retail company. Cologne followed with 98,300 sqm and recorded the sharpest increase (+183%) among the top 8 regions. This was partly due to two large-scale deals involving logistics service providers, as well as an almost twofold increase in the number of deals compared with the same period last year (19 compared with 10 in the first quarter of 2025). Leipzig brought up the rear with 17,600 sqm and recorded the sharpest decline at -65%. This is primarily attributable to the lack of major deals there.
The largest let in the first three months of this year took place in Hamburg’s Stadt-Ost submarket. There, an e-commerce company leased around 50,100 sqm of existing logistics space. The second largest let took place in the Cologne logistics region. An Asian logistics service provider has converted its previous sublease into a main lease for a 35,000 sqm logistics warehouse.
Focus of users in the top 8 markets on the small-scale segment
The focus of users in the top 8 markets was predominantly on the small-scale segment up to 3,000 sqm. More than two-thirds of the deals (68%) were concluded here, accounting for 21% of take-up. This corresponds to a slight increase compared to the same period last year (17% in the first quarter of 2025).
At the end of the first quarter, demand across the top 8 markets was distributed almost evenly across all user groups.
The strongest sectors were logistics service providers and the manufacturing industry, each accounting for 28% of take-up, closely followed by retail companies at 27%.
Rents are rising by an average of 4%
By the end of the first quarter of 2026, 7 of the top 8 locations had a prime rent of over 8.00 €/sqm, with only Leipzig falling below this figure. The top 8 logistics regions recorded average growth of 4% in both prime and average rents. In Frankfurt, due to the tight market and high asking rents, the highest growth in prime rents was recorded at 7%. In Leipzig, they remained stable due to the large supply of space, and in Hamburg due to the price sensitivity of users. In Stuttgart and Munich, however, average rents rose significantly more sharply than prime rents by 10% and 7% respectively, compared with 5% for prime rents in both cities. This is due, on the one hand, to the limited supply of space and, on the other, to the shortage of land in those areas. Consequently, there is hardly any new development taking place.
Since the end of 2025, there has been a noticeable improvement in sentiment on the rental market. Demand is picking up again, especially in the big box sector, where restraint has dominated the last two years.
Major users such as Amazon have revived their expansion strategies and are once again looking for suitable premises. This trend is driven by the continued growth in parcel volumes. Furthermore, increasing demand from the defence industry is expected. Following the first minor deals in 2025, the first quarter of 2026 already saw larger leases, including a planned warehouse of around 65,300 m² in Wettringen, Münsterland, for the German Armed Forces’ clothing management.
The focus of this industry will be primarily on already existing clusters and longer approval processes will lead to deals being delayed and only becoming visible on the rental market in the course of the year. Despite existing geopolitical uncertainties, however, the outlook for the remainder of the year is positive overall and a moderate recovery in the rental market is expected to be above the previous year’s level.
Key figures top 8 industrial & logistics letting market (as of Q1)
| Top 8 | Berlin / Brandenburg | Dusseldorf | Frankfurt / Rhein-Main | Hamburg | Cologne | Leipzig | Munich | Stuttgart | |
|---|---|---|---|---|---|---|---|---|---|
| Take-up Q1 2026 (in sqm) | 558,000 | 77,800 | 77,400 | 66,300 | 108,100 | 98,300 | 17,600 | 56,000 | 56,200 |
| Change yoy | -1% | -9% | -22% | -44% | -11% | +183% | -65% | +96% | +129% |
| Forecast take-up end of 2026 | |||||||||
| Number of deals Q1 2026 | 134 | 15 | 14 | 18 | 14 | 19 | 8 | 31 | 15 |
| Average size per deal Q1 2026 (in sqm) | 4,164 | 5,187 | 5,529 | 3,683 | 7,721 | 5,174 | 2,200 | 1,806 | 3,747 |
| Prime rent Q1 2026 (in €/sqm) | 8.50 | 8.80 | 8.80 | 8.50 | 8.00 | 5.90 | 10.30 | 8.90 | |
| Change yoy | +2% | +6% | +7% | 0% | +4% | 0% | +5% | 5% | |
| Prime rent forecast end of 2026 | |||||||||
| Average rent Q1 2026 (in €/sqm) | 7.70 | 7.10 | 7.00 | 7.30 | 6.50 | 5.50 | 9.50 | 7.90 | |
| Average rent forecast end of 2026 |
Source: Colliers