Düsseldorf Office Market Q1 2025

Overview

Düsseldorf's office letting market (City of Düsseldorf, Hilden, Erkrath, Ratingen and Neuss) remained extremely subdued – and at the start of 2025 recorded its weakest quarter on record. Take-up of around 37,800 sq m was recorded – around 38% less than in the first quarter of the previous year. The decline in take-up was particularly pronounced at -71% in the size class between 1,500 and 5,000 sq m. But even in the smaller segment, which traditionally forms a stable basis in the Düsseldorf market, significantly lower sales were made. The size range between 250 and 500 sq m was still the most solid, with a result that was only 14% lower than in the same quarter of the previous year.

In terms of rents for prime office space, the polarization between CBD and peripheral, more affordable locations, continues. Increasingly, however, the flight to quality can also be observed within the individual submarkets – it does not always have to be the CBD, even within the other submarkets, good locations outperform the less good ones more clearly. Accordingly, the CBD was not the submarket with the highest take-up, as is usually the case, but – mainly due to the large lease by Galeria in RWI 4 – the City-South, followed by the peripheral submarkets South and North and the Harbour and CBD in fourth and fifth place.

Trends

• The sustainably achievable prime rent in the CBD is currently, as at the end of 2024, at €45.00/sq m/month, 7% above the previous year's figure
• The weighted average rent in the overall market continued the downward trend and stands at €17.78/sq m/month, 9% lower than in the first quarter of 2024, contributing not only to the absence of large high-priced transactions, but also to large deals at relatively low rents
• The vacancy rate rose again slightly by 0.4%-points to 11.1% compared with the previous quarter, an increase of 1.2%-points compared with the previous year's figure; in particular, a rather high volume of completed office space that has not yet been let drove the vacancy rate as well as large existing properties, which must now be counted as vacant due to the possible occupancy date
• The supply, which includes vacancy as well as space offered for subletting as well as speculative completions projected for the next 12 months, rose to 13.4%; although the volume of space offered for subletting continued to rise in addition to vacancy, the volume of speculative completions halved and contributed to a slight reduction in supply
• The prime yield for first-class office properties on the Düsseldorf market remained stable at 5.10%; there is also a stabilization in the city peripheral locations and peripheral submarkets

The outlook for the remainder of the year on the Düsseldorf office letting market remains mixed. The deal pipeline suggests up to 350,000 sq m. The decisive factor for annual take-up will be whether the two large owner-occupier projects on Haroldstraße go under construction – and thus contribute almost 100,000 sq m to take-up. However, if the start of construction is delayed - the demolition of the existing building is currently still underway - this would significantly dampen the annual result. According to current knowledge, around 129,000 sq m of new or completely renovated space is expected on the market in the further course of 2025, 80% of which is still available. This means that a further increase in vacancies is also foreseeable. In total, the office space pipeline currently comprises a good 347,000 sq m by the end of 2027, almost half of which has already been allocated to future (owner-occupier) users. Projects under construction are largely continued – with a few exceptions where construction is halted – but speculatively almost no new ones are initiated. Accordingly, supply in the first-class segment fell significantly by 8% in the past three months, while it increased by 4% and 5% respectively in grade B and grade C. In the future, the resulting shortage of high-quality, modern space will support or even drive up prime rents at a high level.

Given the currently quite volatile financial markets, we expect prime yields to continue to stabilize for the time being. However, the ECB's recent monetary policy decisions and possible further interest rate cuts as a result of the tariff turmoil could lead to significantly lower financing levels and thus make real estate investments more attractive again. A subsequent moderate yield compression cannot be ruled out.