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  • NAI apollo: Office lettings market in Frankfurt am Main starts 2018 with a significant increase in take-up

NAI apollo: Office lettings market in Frankfurt am Main starts 2018 with a significant increase in take-up

  • Quarterly take-up of 136,800 sqm is 41.1 % above the long-term average
  • Banks, financial service providers and insurers continue to dominate the office lettings scene
  • Strongest growth registered in contracts for small and medium-sized spaces
  • Vacancies now as low as 916,000 sqm
  • Sharp rise in rents
  • Outlook for 2018: Space take-up well above the 500,000-sqm mark, further reduction in vacancies and rental price growth

Frankfurt am Main, 03.04.2018 – The Frankfurt market for office space including Eschborn and Offenbach-Kaiserlei exceeded the previous year’s result by a considerable margin in the first quarter of 2018, according to the latest analysis by owner-managed real estate consultancy NAI apollo – partner of the NAI apollo group. This is reflected by an increase in the number of lease contract signings and a higher take-up volume. In the first three months of 2018, the number of contracts stood at 178 — which is 8.5 % higher than the already good result of the previous year (Q1 2017: 164). Compared to the first quarter of 2017, space take-up by tenants and owner-occupiers grew 9.9 % to 136,800 sqm and represents one of the best first quarters since the turn of the century. The result is also 41.1 % above the average for the past five years (Q1 2013 – Q1 2017: 96,900 sqm per quarter). “The excellent start to the year was influenced by the general market recovery, but especially by the strong growth in lettings of small and medium-sized spaces,” said Radomir Vasilijevic, Head of Office & Retail Letting at NAI apollo.

Small and medium-sized contracts dominate the lettings landscape
In addition to take-up growth of 12.0 % in the segment for spaces smaller than 1,000 sqm and of 21.5 % in the 2,501 sqm to 5,000 sqm segment, the Frankfurt office market also boasted one large contract above 10,000 sqm. With a total area of 24,000 sqm, the lease signed by Frankfurter Allgemeine Zeitung (FAZ) in a project development at 92, Europa-Allee represents the largest letting of the year to date. The second-largest deal for 8,000 sqm was signed by Bethmann Bank in Marienforum, followed by the rental of about 6,600 sqm by FM Global in T8.

Partly because of the large contracts, the banking, financial service provider and insurance sector was in pole position in the ranking of different industries, accounting for a share of 23.4 % or 32,000 sqm. This sector more than doubled its take-up of space compared to the previous year. The second-placed publishing and media sector registered an even stronger increase because of the FAZ contract, increasing its share of take-up from 5.9 % or about 7,400 sqm in the first quarter of 2017 to 18.5 % or about 25,400 sqm in the recent quarter.

Notable increase in rental prices
“The most popular sub-markets in the first quarter of 2018 were the banking district as well as the trade fair and Europe quarter (Messe/Europaviertel) with 24.3 % and 18.1 % of overall take-up respectively. This indicates that user demand increased further in both sub-markets,” said Dr. Konrad Kanzler, Head of Research at the NAI apollo group. Accordingly, take-up in the CBD, where the two sub-markets are situated, also increased from 74,400 sqm in Q1 2017 to 94,000 sqm.


The positive rental price trend in recent years continued into the first few months of 2018. Within the last 12 months, the space-weighted average rent increased by 10.4 % or €2.00/sqm to €21.30/sqm. The prime rent also registered an increase of 3.8 % or €1.50/sqm to €40.50/sqm and is therefore moving increasingly closer to the previous peak recorded in 2008.

Vacancies continue to decrease
In the first three months of 2018, three projects with a total office space of 27,700 sqm were completed in the Frankfurt market area. Around 6,700 sqm was removed from the office market, meaning that office stock increased again to 11.41 million sqm after falling in 2017. Over the remaining months of 2018, a further 107,200 sqm of office space is expected to be completed, of which 89 % is already let. In 2019, planned project developments currently stand at 171,200 sqm with a pre-let ratio of about 40 % at present.

Market-active vacancies on the Frankfurt market for office space — that is, office space that can be occupied within three months of the contract signing — fell again by a significant amount in the first quarter of 2018. “As of 31.03.2018, only 916,000 sqm of office space was available to the market at short notice. The resulting vacancy rate of 8.0 % is 2.4 percentage points below the previous year’s level,” explained Dr. Konrad Kanzler.

“It is already possible to predict that office space take-up in the year as a whole will be well above average owing to the very good start to 2018, current negotiations on large contracts and further rental activity as a result of Brexit,” said Radomir Vasilijevic. “As a result, the sharp reduction in vacancies will continue, alongside a further rise in office rents.”

About NAI apollo
NAI apollo real estate is an owner-managed real estate consultancy. Its service range includes real estate brokerage, corporate finance services, project development, asset and property management, and valuation services. In addition to its headquarters in Frankfurt am Main, the company maintains offices in Munich and Stuttgart. NAI apollo real estate is also the exclusive German partner of NAI Global (www.naiglobal.com), the worldwide largest network of owner-operated providers of professional and discerning real estate consulting services. NAI Global has over 7,000 employees worldwide and manages properties with a total floor space of around 425 million sqm. The network advises on property transactions amounting to approximately US$20 billion per year (as of April 2017).

About NAI apollo group
NAI apollo group represents a network of individual, entrepreneurial and independent partner companies. The partner network takes an interdisciplinary approach and, with its team of 200 specialists, operates both nationally and internationally in the office, industrial, residential and retail property classes. Partners of NAI apollo group in Germany are corealis Commercial Real Estate GmbH (Dusseldorf), Cubion Immobilien AG (Mulheim an der Ruhr), Kasten-Mann Real Estate Advisors GmbH & Co. KG (Berlin), Larbig & Mortag Immobilien GmbH (Cologne/Bonn), NAI apollo real estate (Frankfurt am Main, Munich), Objekta Real Estate Solutions GmbH (Ulm), Strategpro Real Estate GmbH (Mannheim) and Völckers & Cie Immobilien GmbH (Hamburg).

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