Rising Office Rents: Frankfurt in High Demand - Frankfurt's Office Rents Surge as Other German Cities Struggle
Frankfurt stands out as the lone major German city witnessing a significant rise in office rents across all segments. This trend bucks the national trend, where office real estate recovery remains gradual while residential prices surge.
IVD Vice President Jeanette Kuhnert underscored the significance of location, amenities, and usage concepts for commercial real estate. In Frankfurt, even basic office rents, handled by realtors, soared by ten percent, outpacing gains for mid-range and premium spaces. This is a stark contrast to other cities like Düsseldorf, which saw a sharp drop of nearly 19 percent for premium offices, and Hamburg, which also experienced significant declines.
Munich, however, remains the most expensive metropolis, with average rents ranging from €23 per square meter for basic offices to €50 for high-end spaces. The shift to remote work has led companies to downsize or offload office space, contributing to the office market crisis in recent years. However, in the first half of the year, rents for high-quality office space in the eight largest cities increased by roughly six percent, with Frankfurt leading the way.
Property owners of older commercial and office buildings in Frankfurt am Main face increasing pressure to invest in energy efficiency and modern amenities to avoid long-term vacancies. This is particularly due to structural market changes post-pandemic and higher demand for sustainable properties. While the outlook for commercial property prices showed little movement, retail rents fell on average, indicating a mixed picture for the German real estate market.
