Office demand up in Germany, despite hybrid work

Despite economic uncertainty and evolving work models, the German office market is experiencing continued demand. 

Offices

According to Wüest Partner's "Office Report Germany 2025," this demand is driven by a 3.7% increase in office workers between 2021 and 2024, outpacing overall employment growth. Demand for office space remains stable, especially in knowledge- and service-oriented sectors.
The study analyzes 37 cities, offering city-specific profiles detailing economic strength, demographics, and office market dynamics for precise risk-return comparisons. 
Berlin's rental market is booming, having doubled median rents since 2015, followed by Bonn and Potsdam, which boast rents significantly above average. Leipzig, Hanover, and Potsdam are also benefiting from strong economic and demographic tailwinds. In contrast, Frankfurt and Düsseldorf face high vacancy rates. Despite this, Munich remains at the top, commanding rents above €35/m².
Frankfurt and Düsseldorf stand out among the top seven cities with high office vacancy rates, hovering around 10%. Conversely, Braunschweig's tight market, with only 1.8% vacancy, supports its rental values.
Attractive risk-return profiles can be found in Regensburg, Karlsruhe, and Erfurt, offering alternatives to the high-priced A-cities like Munich and Frankfurt. Ludwigshafen provides the highest return potential but with increased risk. Regensburg and Karlsruhe offer a strong balance of risk and return, while Erfurt shows positive market growth.
Prime yields in Germany range widely. Bonn, Mainz, and Potsdam have yields under 5%, while Ludwigshafen offers the highest returns (over 6%) with higher risk. Karlsruhe and Regensburg stand out for favourable risk-return ratios. Duisburg and Magdeburg, however, are less attractive due to higher risks not justified by returns.
Despite hybrid work models, a moderate increase in demand for office space is forecast through 2030 by Wüest Partner. Knowledge- and service-intensive sectors, including freelance, scientific/technical services, IT/communication, and public administration, will account for most of this growth. The study notes a shift in demand towards modern, flexible, and ESG-compliant spaces in well-connected central locations. The existing office stock often fails to meet these requirements, increasing the need for revitalization, conversions, or new construction.
Sophie Nieder, senior economic market analyst at Wüest Partner, commented: "The German office market is facing structural change. The key question is not whether office space is needed, but which one. Modern, ESG-compliant buildings with high quality of use have stable prospects in all market phases."