Germany's top 5 office markets show a mixed start to 2026

Germany's five largest office leasing markets (Berlin, Düsseldorf, Frankfurt, Hamburg, and Munich) experienced varied results in the first quarter of 2026.

Development of office take-up - CBRE

While Berlin and Munich saw significant increases in office space absorption due to several major deals, Frankfurt and Hamburg reported declines, attributed to selective demand and fewer large lease agreements. Overall, take-up across these markets reached approximately 516,000 m2, a decline of over 15% compared to the same period last year, according to CBRE's analysis.

Despite a moderate increase in the average vacancy rate to 8.6% (up 1.1 percentage points year-on-year), rents continued to rise. Prime rents, in particular, increased across all locations. This trend is driven by companies seeking high-quality, modern, and ESG-compliant office spaces in central areas, which are scarce. With ongoing competition for skilled workers, the quality of office fit-outs is becoming critical. Companies are increasingly using attractive locations and modern workspaces as a strategy to attract and retain employees, pushing up top-tier rental prices. Conversely, older office buildings that don't meet ESG standards are facing higher vacancy rates.

Berlin saw a 48% increase in take-up compared to Q1 2025, reaching 171,600 square meters—9% above its five-year average. The tech sector remained the primary driver, accounting for 23% of activity. After a year without significant deals, Q1 2026 recorded six lease agreements over 5,000 m2 (two exceeding 10,000 m2), primarily in new developments. Prime rent rose to €46.00 per m2, and while average rent for existing properties decreased, it jumped 27% year-on-year for new projects.

Munich solidified its position as the second strongest office market with 155,000 m2 in take-up, an increase of 17.6%. Companies prioritised quality locations, with about 73% of take-up occurring within the Mittlerer Ring (inner ring road), where the vacancy rate dropped to a low 3.4%. Prime rent hit a new record high of €61.00 per m2 (up 5.2%).

Düsseldorf maintained its previous year's level, with around 40,800 m2 in take-up. However, the average deal size increased, indicating greater decision-making in the mid-to-large segment. The weighted average rent significantly rose by 16.6% to €20.78 per m2. With speculative construction slowing, the supply of high-quality office space is expected to remain limited in the coming years.

Take-up in Hamburg fell by 35% to 79,300 m2. However, this was attributed more to selective demand and hesitation in expansion decisions rather than underlying structural weakness. Consequently, Hamburg still boasts the lowest vacancy rate among the Top 5 markets at 4.2%. Prime rent also saw a considerable year-on-year increase, climbing 14% to €41.00 per m2. Owner-occupiers accounted for a significant portion of Q1 take-up, including the start of construction for MSC Germany's headquarters in HafenCity.

Following a strong Q1 last year, boosted by Commerzbank's major letting in the Central Business Tower, Frankfurt experienced a substantial decrease in take-up to 69,400 m2 (down 65%). Despite lower take-up, prime rent increased considerably by 7.8% to €55.00 per m2. This highlights the scarcity of top-tier properties in the banking district, particularly in the most premium segments.

Despite a downward revision of the GDP forecast to 0.5% for the current year, individual large lease agreements suggest a moderate market recovery throughout the year. However, the market remains highly uncertain, as indicated by declining sentiment and leading economic indicators. In this challenging climate, CBRE expects office space take-up in the top five markets to stabilise at last year's levels. Looking further ahead, a shrinking construction pipeline from 2027-2028 is likely to cause vacancy rates for modern office spaces to fall again over the medium term, driven by increasing demand.