Düsseldorf’s office letting market achieved take-up of 66,100 sq m in the 1st quarter of 2022, but large-area deals remained rare. Compared to the weak result of the first quarter last year, this represents an increase of around 36 percent, while take-up eas around 26 percent lower than the Q1 5-year average. The largest lease to date was signed by the Federal Institute for Real Estate Tasks (Bima) for around 7,900 sq m in the Federal Information Technology Centre (Informationstechnikzentrum Bund) at Theodorstrasse 109 in the Düsselorf-Nord submarket, the only deal of 5,000 sq m or more in Q1.
Large companies still cautious as tenants
"Large companies in particular are currently exploring their medium-term workplace strategies and remote working policies," explains Martin Höfler, Head of Office Agency in Düsseldorf at Cushman & Wakefield. "With a view to the existing supply reserve and office development projects under construction, sufficient options are currently available. In particular, the prospective new developments meet the requirements for flexible room design, innovative office concepts and sustainability aspects. Overall, the letting momentum is again very high with almost 120 leases signed. Taking into account the lifting of the restrictions due to Covid and some active large-scale property searches, we forecast office take-up of up to 320,000 sq m by the end of the year. "
Office vacancy rate increased
The office vacancy rate in Düsseldorf as of the 1st quarter of 2022 is just under 7.8 percent. Compared to the first quarter last year, the amount of office space available for immediate occupancy has increased by around 12 percent to 724,500 sq m. At the same time, the rate of increase in vacancy in recent quarters has slowed significantly. At the end of 2021, Düsseldorf's office vacancy rate was only slightly lower at 718,200 sq m.
Office completions at a high level
In the 1st quarter of 2022, office completions in Düsseldorf totalled some 42,000 sq m which as almost 36 percent below the level of 12 months earlier. A considerable proportion of the completed space was contributed by the Heinrich Campus of Quantum Immobilien AG, a new office building with 36,500 sq m of lettable area, which was handed over to main tenant Deloitte in February 2022. Currently, around 95,900 sq m of office space is still under construction, with a planned completion volume of around 138,000 sq m by the end of 2022. At present, around 33 percent of the planned office space is still available. Overall, the office completion pipeline in Düsseldorf (current space under construction) amounts to around 367,900 sq m by 2025, of which almost 38 percent is already pre-let.
Prime rent remains stable
At the end of the 1st quarter, the achievable prime office rent was EUR 28.50/sq m per month, achieved in the Central Business District (CBD) submarket. By the end of the year, however, a slight increase is expected. The weighted average rent of the past 12 months is currently EUR 16.45/sq m per month. Compared to the same point last year, this corresponds to an increase of around 8 percent, which is due in particular to the numerous leases concluded in the medium-range size segment between 1,000 and 3,000 sq m. The lettings include some high-priced and high-quality spaces. Overall, the willingness to pay for quality has also increased in the case of small-scale rentals.