Many very small deals are causing a low in take-up
In keeping with the temporarily paralyzing heat in the city, the Cologne office rental market experienced a severe slump in sales in the second quarter. Only 26,900 m² of space was newly leased, which is another 45 percent below the already weak figure of the previous year. Added to the first half of the year, the cathedral city comes to 73,100 m², which requires a significant increase so that the forecast of 190,000 m² for the year as a whole can still be achieved.
“The balance so far is very sobering for a city of over a million and can only be compared with the two years 2020 and 2023, where at least just over 200,000 m² ended up in the end,” compares Knut Kirchhoff, branch manager of JLL Cologne. “But even for that, it would now take several medium-sized or large leases, which were completely absent in the second quarter. In the three months, even the largest deal with 900 m² was still in the triple digits.” The previous low value for a single quarter resulted from the start of 2024 with 2,300 m².
Activity in the market focused on small leases, as the number of contracts fell only moderately by ten year-on-year to currently 152. Accordingly, the average deal size fell to 482 m² in the first half of the year.
The City developed the most momentum in the first half of the year, with a total of 31,800 m² taken up with 48 lettings, which corresponds to 43.5 per cent of total take-up. Three of the four largest deals were also registered here. These include Deutsche Bank with 7,000 m² in Tunisstraße, MSIG Europe with 3,400 m² in Mediapark and the General Association of Catholic Parishes with 2,100 m² on Börsenplatz. The Ehrenfeld/Braunsfeld submarket follows at a considerable distance with 8,100 m² or a share of 11.1 percent.
A small ray of hope in the second quarter, on the other hand, comes from the project developers. For example, 41,000 m² of new office space was completed after there were no new additions at the beginning of the year. “This modern space is urgently needed, but it was either intended for owner-occupiers or already allocated when construction was completed,” says Kirchhoff. “Cologne still lacks sustainable, modern space in top locations that can also achieve higher rents.”
As in the past four quarters, the prime office rent is 32.50 euros/m². However, it cannot be ruled out that the price screw will turn up by another euro by the end of the year.
