FRANKFURT (dpa-AFX) - Offices in major German cities are increasingly standing empty - even though some companies are bringing their employees back to the office in greater numbers. According to an analysis by real estate specialist Jones Lang LaSalle (JLL), the economic downturn is having an impact alongside the increase in people working from home.
Although the office rental market in the seven major cities of Berlin, Hamburg, Munich, Frankfurt, Dusseldorf, Cologne and Stuttgart recovered slightly in 2024 compared to the previous year, However, with a take-up of 2.7 million square meters, new leases remained around 30 percent below the average of the past ten years, writes JLL.
Accordingly, vacancies in the seven office real estate strongholds continued to grow. The amount of space available at short notice now totals 6.7 million square meters, which corresponds to a vacancy rate of 6.8 percent (end of 2023: 5.8 percent). Office properties are continuously coming onto the market, but are not always rented immediately. The demand of companies for smaller but better offices remains: many are looking for modern and mostly sustainable space, and older and unrenovated space is increasingly standing empty.
Companies unsettled by the crisis
The economic crisis is also slowing demand for office space. Companies are reacting sensitively to the geopolitical and economic situation, said JLL expert Konstantin Kortmann. "At the same time, the fact that many companies continue to postpone major and long-term decisions about relocations and expansions and that most large-scale leases in excess of 10,000 m2 are accounted for by the public sector reflects a general sense of uncertainty."
Since the coronavirus pandemic, working from home has become established in Germany, although some companies, such as Deutsche Bank and SAP, are again demanding more presence from their employees. Many companies are downsizing their spaces. The trend towards working from home is likely to reduce demand for office space in Germany's seven largest cities by more than a tenth by 2030, according to an earlier study by the Ifo Institute and real estate consultants Colliers./als/DP/men