Sideways trend in the office lettings market continues – Berlin, Munich and Düsseldorf record strong take-ups

At the end of the third quarter, office space take-up in Germany’s key office hubs – Berlin, Düsseldorf, Essen, Frankfurt, Hamburg, Cologne, Leipzig and Munich – totalled just under 2.0 million m². The market is thus at the same level as the previous year (-1.6 per cent). Berlin, Munich and Düsseldorf stand out positively in the overall results with double-digit growth rates. The majority of markets reported rising take-up in the third quarter, albeit at a low level. This is according to an analysis by BNP Paribas Real Estate.

Space turnover:

• Top 8 locations at just under 2.0 million m² (-1.6 per cent year-on-year)
• Berlin (+49 per cent), Düsseldorf (+28 per cent) and Munich (+19 per cent) show the strongest growth

Vacancy rate:

• Vacant space remains unchanged at 9.1 million m²
• New-build space ready for first occupancy in prime locations remains in short supply

Construction activity:

• Construction volume continues to decline slightly
• The pre-let rate rises to an average of 45 per cent

Rents:

• Prime rents continue to trend upwards: now at €60.00/m² in Munich
• Average rents under temporary pressure: currently at €22.00 per m²

“With a total take-up of just under 2.0 million m², Germany’s key office markets have matched last year’s performance, which is once again a remarkable achievement. Rising interest rates, a weak economy and tenants’ now more finely tuned requirements had the potential, over the summer months, to exert a significant negative impact on the lettings market once again. It is therefore all the more remarkable that, in the majority of the markets we examined, office space take-up actually rose moderately again in the third quarter, with Berlin, Munich and Düsseldorf performing particularly well over the year as a whole, thanks to major deals and double-digit growth rates. Meanwhile, little has changed in the underlying market dynamics: “Major deals make the difference, whilst smaller leases set the pace for day-to-day business,” explains Marcus Zorn, CEO of BNP Paribas Real Estate Germany.

With office space take-up of 541,000 m², the German capital remains by far the leader among Germany’s office markets, even after three quarters. The year-on-year increase in take-up stands at an impressive 49 per cent, marking a successful return to long-term levels. Berlin stands out particularly positively in a comparison of major locations in 2026, especially when it comes to deals exceeding 5,000 m². More than 20 contracts of this scale have been concluded in Berlin this year, with the deal involving Berliner Verkehrsbetriebe (BVG) in the third quarter, covering an area of just over 39,000 m², and the 31,500 m² contract with the Federal Ministry for Economic Cooperation in the second quarter, send a strong signal to the market that, after four years, the really large contracts are now back in Berlin too. Munich rounds off the leading duo with 485,000 m² (+19 per cent compared with the same period last year) and, in addition to the major deals from the first half of the year, is benefiting from very strong letting momentum in the mid-sized segment. The total take-up from contracts between 2,000 and 5,000 m² currently stands at around 106,000 m², which is approximately 81 per cent higher than the previous year’s level. This development reflects the trend towards smaller but higher-quality office space: 50 per cent of the leases were for new-build, first-occupancy space, whilst a further 20 per cent are to a modern standard.

Whilst Frankfurt (300,000 m²) and Hamburg (270,000 m²) have been unable to match their good – or, in Frankfurt’s case, very good – results from the previous year, they did, however, record a moderate upturn in momentum in the third quarter, whilst Düsseldorf made a strong impression with a robust third quarter – the strongest in terms of take-up since Q2 2022, at 99,000 m². By the end of September, take-up in the Rhine metropolis stood at 198,000 m² (+28 per cent year-on-year), and with the recent Uniper lease (37,000 m²) in the ‘New Heart on The Block’ development, the largest deal in 14 years was concluded – the fifth-largest ever in the history of the Düsseldorf office market. The Cologne market is moving sideways at a low level, recording a take-up of 107,000 m² (-39.5 per cent year-on-year) at the end of September. Leasing activity in Leipzig (55,000 m²) and Essen (31,000 m²) is also well below average; however, the third quarter was the strongest of the year in both cases, suggesting that the market may slowly be bottoming out.

The vacancy rate in Germany’s key office markets stands at 9.1 million m², confirming the level seen in the previous quarter. With the exception of Frankfurt and Munich, where the volume rose once again by around 20,000 m² in each city during the third quarter, the vacancy rate in all other locations is either stable or showing a moderate downward trend. The lowest vacancy rates are recorded for Leipzig (6.2 per cent), Hamburg (6.4 per cent) and Cologne (7.1 per cent). Munich (8.1 per cent), Essen (8.4 per cent) and Berlin (9.6 per cent) follow. The rate for Frankfurt currently stands at 11.9 per cent, whilst in Düsseldorf it remains unchanged at 12.4 per cent.

The volume of new-build, first-occupancy space available for immediate let in prime locations within Germany’s key office hubs continues to decline, totalling 67,100 m². In the leading markets of Berlin, Munich, Frankfurt and Hamburg, premium space in so-called ‘prime’ locations is in extremely short supply. In Cologne and Essen, such space is effectively unavailable at all, which impressively highlights the excess demand in this segment and the need to fulfil such space requirements exclusively through project developments.

Against a backdrop of high construction costs and tighter financing conditions, the volume of space under construction continues to decline and now stands at 2.1 million m² (down 8 per cent on the previous year). Only in Berlin, Düsseldorf and Hamburg have a few small-scale projects recently entered the construction phase; in all other markets, the trend remained clearly downward in the third quarter as well.

There has been little change recently in the volume of planned floor space. As in the previous quarter, it stands at 8.3 million m² (-9 per cent year-on-year). Whilst developers are bringing at least smaller projects to market in the strong markets of Berlin, Munich and Frankfurt, they remain very cautious about future developments in other locations.

Pre-letting rates remain high as a result of strong demand for new-build, first-occupancy space and a shortage of vacancies in precisely this quality segment. Averaged across all top markets, the figure has now risen to 45 per cent. Munich, at 44 per cent, is exactly in line with the average. Whilst below-average rates are recorded for Berlin (23 per cent) and Hamburg (32 per cent), the rate exceeds the 50 per cent mark in Essen (52 per cent), Düsseldorf (59 per cent), Frankfurt (66 per cent), Cologne (74.5 per cent) and Leipzig (79 per cent).

The supply of available space relevant to the office market (comprising vacant space and space still available in construction projects) has been moving sideways and remained unchanged at 10.3 million m² at the end of September.

Pressure on prime rents remains high across all key office markets, although for the time being this is only reflected in a rise in Munich. In the Bavarian capital, the prime rent reached €60.00/m² for the first time in the third quarter, representing an increase of €5.00/m² or 9 per cent compared with Q3 2025. By contrast, prime rents in Frankfurt (€57.00/m²), Berlin (€47.00/m²), Düsseldorf (€46.00/m²), Hamburg (€39.00/m²), Cologne (€33.50/m²), Leipzig (€21.00/m²) and Essen (€20.00/m²).

The average rent across all locations fell slightly in the third quarter to €22 per m². A key factor here is the comparatively lower take-up in the absolute premium segment, whilst large-scale leases have recently been finalised, particularly in Berlin, even in older existing buildings, temporarily pushing down the average rent. However, companies’ general focus on modern and ESG-compliant office space will continue to strengthen and is expected to drive average rents further upwards in the long term. The average rent is highest in Berlin at €28.50 per square metre, followed by Frankfurt (€27.60 per square metre) and Munich (€26.90 per square metre). Düsseldorf (€24.00/m²), Hamburg (€21.20/m²) and Cologne (€20.90/m²) occupy the middle of the table. Leipzig (€13.60/m²) and Essen (€13.40/m²) bring up the rear.

The German office markets are entering the final quarter of the year with slightly more momentum. For the first time in a long while, the German economy is showing signs of accelerating growth. Exports have recently risen more sharply than expected, as has industrial production. Both the OECD and the leading German economic research institutes have significantly raised their growth forecasts. The recovery is gaining ground, and the economy is picking up pace. For 2026, the institutes forecast GDP growth of 1.3 per cent, compared with the previously expected 0.6 per cent. Among the leadership of the German business community, too, expectations are now considerably more optimistic than before. Buoyed by rising business expectations and, above all, by improved sentiment in the services sector, the ifo Business Climate Index has been heading in only one direction since May: upwards. It currently stands at 89.9, a level last seen in 2023. Rental activity, which in recent months has been driven primarily by structural changes on the tenant side, could thus receive significant impetus from the economy in the coming months.

For the time being, however, the economic recovery remains fraught with uncertainty. High energy costs, challenging financing conditions and geopolitical risks continue to limit companies’ ability to plan with certainty. Demand for office space is therefore likely to pick up gradually and at varying rates across individual markets. Locations where future-oriented industries are based and innovative growth clusters are emerging are likely to lead the way. For the market as a whole, demand will continue to focus on modern, efficiently usable and ESG-compliant office space in well-connected locations.

“The increase in take-up seen in the majority of markets during the third quarter provides a solid foundation for the final quarter. The latest major deals underscore the fact that businesses and public-sector tenants are going ahead with their space decisions even under challenging conditions. For the coming months, we expect leasing activity to remain stable or to pick up slightly, although large-volume contracts are likely to continue to be the decisive factor in the performance of individual locations. For the year as a whole, we consider it realistic to expect take-up to remain at the previous year’s level. At the same time, there are increasing signs – particularly in central office locations – that the cyclical peak in vacancy rates has been reached. Upward pressure on prime rents is likely to persist, as declining construction activity and rising pre-let rates suggest that the tight supply of premium space is unlikely to ease in the foreseeable future. For older existing buildings that no longer meet today’s occupier requirements, refurbishment, repositioning and, where necessary, repurposing remain key priorities,” says Marcus Zorn, summarising the outlook.