FRANKFURT (dpa-AFX) – The proportion of vacant office space in Germany’s major cities has climbed to its highest point in over a decade, according to leading real estate broker JLL. Alongside the ongoing trend toward remote work, the economic slowdown and uncertainty surrounding U.S. tariffs are also having an impact. These factors are causing companies to hesitate when it comes to investments and new hires, writes real estate specialist Jones Lang LaSalle.
The supply of immediately available office space across the seven metropolitan hubs – Berlin, Hamburg, Munich, Frankfurt, Düsseldorf, Cologne, and Stuttgart – totaled more than 7.6 million square meters in the second quarter, JLL reports. This equates to a vacancy rate of 7.7 percent. “This marks the highest level in more than a decade and is now significantly above what is considered a 'healthy' vacancy rate for the markets, which is around five percent.” For comparison: before the onset of the coronavirus pandemic, the rate in these cities stood at 3.0 percent. The last time the figure was higher was in 2013, at 8.0 percent.
Companies Hesitant to Sign New Leases
While more office space was leased in the first half of 2025, with nearly 1.4 million square meters representing a nine percent increase year-on-year and several major deals in the pipeline, the initial enthusiasm of the year has somewhat faded, said Miguel Rodriguez Thielen, Head of Office Leasing at JLL Germany. In some cases, deals are being postponed, and companies are more frequently opting to extend existing contracts rather than rent new space.
Frankfurt Leads, Berlin Lags Behind
Among the major cities, Frankfurt saw the largest increase in office space turnover, up by 86 percent. However, this was mainly due to major deals in the financial sector, including with Commerzbank and ING. In contrast, Berlin experienced a decline in office space turnover of just over 19 percent.
Rising interest rates and the end of the real estate boom have hit office markets hard. While prices for residential properties are once again rising sharply, recovery in the office sector has been sluggish. With the shift toward remote work, many companies are downsizing and offloading older buildings, even as newly constructed offices continue to enter the market.
The market is also seeing a trend toward “smaller but higher quality” spaces: while companies are willing to pay premium rents for modern offices in prime locations, older office buildings are increasingly left vacant, especially in outlying areas.
