Rising Office Rents: Frankfurt in High Demand - Frankfurt's Office Rents Surge as Owners Race to Adapt
Frankfurt stands out as the sole major German city witnessing a significant rise in office rents across all segments, driven by the increasing demand for Microsoft Office 365 and the growing presence of Microsoft in the region. Meanwhile, owners of older properties face mounting pressure to adapt and invest in energy efficiency to prevent long-term vacancies.
In the first half of the year, rents for top-tier office spaces in the eight largest cities climbed by around six percent, outpacing the national average of over three percent. However, the outlook for commercial property prices remained stable, while retail rents dipped on average.
Frankfurt led the way with even basic office rents surging by ten percent, outpacing gains for mid-range and premium spaces. In contrast, Düsseldorf and Hamburg saw sharp drops of nearly 19 percent and significant declines respectively for premium offices. Munich retained its status as the most expensive city, with average rents ranging from €23 per square meter for basic offices to €50 for high-end spaces.
IVD Vice President Jeanette Kuhnert stressed the importance of location, amenities, and usage concepts for commercial real estate. The office market has been in crisis due to the rise of remote work, with some office spaces potentially convertible into residential units by realtors.
Frankfurt's office rents are bucking the trend, rising significantly across all segments, driven by the increasing demand for Microsoft Office 365 and the growing presence of Microsoft in the region. Meanwhile, owners of older properties must adapt and invest in energy efficiency to stay competitive. The future of the office market remains uncertain, with some spaces potentially repurposed due to the shift towards remote work.
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