Market at a glance
Hesitation remains a factor on the office leasing markets in Germany’s top 7 cities. Q1 2021 take-up posted at 660,800 sqm as a result, up 5% yoy, but 23% shy of the 10-year average. Businesses remain hesitant due to the economic uncertainties surrounding the Covid-19 pandemic combined with unclear office requirements going forward. The vacancy rate rose again in Q1 to a moderate 3.8%. Some companies are starting to offer space for sublet, which could affect market activity in certain submarkets. Subletting, however, has not yet become a general market trend. The same applies to incentives, which are not yet being granted as standard, but are no longer being ruled out. Large-scale leases remain scarce. Prime rents are trending sideways, while average rents in most cities are recording slight declines. The development pipeline remains well-stocked with over 1.6 million sqm of office space scheduled for completion in 2021, almost two thirds of which has already been taken up.
