BNP Paribas Real Estate publishes office market figures for the 1st quarter of 2026
After market activity had already picked up significantly in the second half of 2025, this upward trend was impressively continued in the first quarter of the current year despite the persistently difficult economic and geopolitical conditions. With take-up of 172,000 m², the Munich office market recorded a strong first quarter of 2026 and was able to increase earnings by almost 26% compared to the same period last year. This makes the Bavarian capital not only one of the few locations that was able to increase sales, but it also impressively took the lead among the major German cities. This is the result of the analysis by BNP Paribas Real Estate.
"The fact that a number of major deals were already registered in Munich in the first three months of the year also contributed to this. At around 48% of total take-up, the share of size class over 5,000 m² is well above the average of recent years. The most important contracts include the lease of JetBrains for 21,000 m² on the northern edge of the city and the conclusion of E.ON's 20,500 m² on the edge of the city centre, which was supported by BNP Paribas Real Estate," explains Michael Morgan, Munich branch manager of BNP Paribas Real Estate GmbH. Accordingly, the peripheral zones account for the highest share of take-up at around 64,000 m² (37%).
The development of rents has also been dynamic: at currently €59.50/m² (+11% compared to Q1 2025), the prime rent has risen once again and is close to the €60 mark. Munich is and remains the most expensive office location in a nationwide comparison, ahead of Frankfurt and Berlin.
Munich's leading industries lead the ranking
The decisive factor for the good result is that the sectors that are particularly important for Munich have noticeably increased their leasing activity again. Driven by large deals – for example by E.ON, Uvision Europe and NXP – as well as by many contracts from the industrial administration sector across the entire market area, this user group clearly leads the industry ranking with around 47%. This result also reflects the increased demand from the arms industry segment. ICT technologies follow in second place with a share of just over 22%, to which the above-mentioned large-scale lease of JetBrains has contributed, among other things.
The vacancy volume has remained almost stable year-on-year and stands at around 1.8 million m². The important category of modern spaces recorded a slight decline of about 5%. This means that around 828,000 m² or 45% of the vacant space currently has modern furnishings. The vacancy rate in the market area is 8.0%. Due to the strong demand in the central locations, the supply there remains limited. This is also reflected in the vacancy rate: in the city of Munich, it is only 3.4%. First-time new-build space also remains at a low level, especially in city locations, and adds up to just around 8,000 m².
Prospects
Despite difficult conditions, the Munich office market can look back on a strong first quarter with increased take-up and thus clearly sets itself apart from the other top locations in a nationwide comparison.
It is true that the current geopolitical conflicts in the Middle East are having a noticeable impact on the global economy and could also slow down the German economy. Nevertheless, there is a lot to suggest that leasing dynamics will continue to be buoyant on the Munich market. On the one hand, the investment programme for armaments and infrastructure initiated by the German government is likely to continue to have a stimulating effect on demand. An indication of this is the fact that a number of lettings have already been recorded in this segment since the beginning of the year. In addition, there are some large-scale requests on the market that are likely to have a positive influence on market sentiment. Against this background and in view of the good start to the year, take-up in the range of the long-term average (~650,000 m²) seems realistic.
"On the supply side, there are signs of a sideways movement in the vacancy rate at the level reached. The peak is likely to have been reached, so that even a moderate decline cannot be ruled out. Especially in the premium space segment, supply is likely to decline further. At the same time, the pressure on prime rents remains high, so that the €60/m² mark is likely to be exceeded in the short term," predicts Michael Morgan.
