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Increasing number of offices being built speculatively in Düsseldorf

Verena Bauer • 10/10/2022

The Düsseldorf office letting market achieved a take-up of 205,200 sq m in the first three quarters of 2022, reports international real estate consultancy firm Cushman & Wakefield. Compared to the previous year's equivalent figure, this is a decline of just under 4 percent. Take-up momentum slowed again in the 3rd quarter. 

The main reason for the declining take-up is the lack of large deals, with the result that lettings of less than 1,000 sq m are the main driver. With around 4,400 sq m of office space, the letting of Air Liquide in The Oval in the Kennedydamm submarket was the largest deal of the third quarter.

Martin Höfler, Head of Office Agency Düsseldorf at Cushman & Wakefield, explains: "Due to the current mixture of high inflation and great uncertainty regarding economic development, major users are acting very cautiously in their leasing decisions. A circumstance that can be observed above all in speculative office projects, which are being driven forward with increasingly low pre-letting rates. Some large users are adapting their office space to the reduced space requirements and opting for subletting. Prospectively, a rising vacancy rate is also to be expected. For the final quarter, it remains to be seen whether the few major lettings under negotiation will be concluded this year. Office take-up of up to 300,000 sq m is therefore forecast for 2022 as a whole."

 

Office market Dusseldorf Q3 2022

 

Vacancy rate continues to rise

The office vacancy rate at the end of Q3 is just under 7.9 percent. Compared to the same point last year, the office space to let for immediate occupancy has increased by around 15 percent, to 731,400 sq m.  

Pre-letting rates decrease 

The office completion volume in the first three quarters of 2022 totals 96,900 sq m and is thus on a par with the comparable period last year. If construction progresses according to plan, a further 21,800 sq m of office space will be ready for occupation in the fourth quarter. Overall, the office completion pipeline in Düsseldorf up to 2025 (current space under construction) amounts to around 313,800 sq m, of which just under 38 percent is let. Compared to last year (70 percent), the pre-letting rate has thus fallen significantly. 

Prime rent level remains high, average rent on an upward trend

The achievable prime office rent in Düsseldorf has remained stable at EUR 30.00/sq m per month since Q2 2022 and is mainly achieved in the Central Business District (CBD) submarket. Leases at a similarly high rent level can be observed in very good locations and ultra-modern space in the City office submarket.

The weighted average rent has continued to rise over the past twelve months, currently reaching a new high of EUR 18.40/sq m per month. Compared to the same juncture last year, this represents an increase of around 16 percent. Since the outbreak of the Covid-19 pandemic, rental prices have primarily been driven up by high quality standards and the demand for new and ultra-modern office space.

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verena bauer
Verena Bauer

Head of Marketing & Communications Germany, Cluster Lead • 60313 Frankfurt am Main

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