Press Release: Frankfurt office lettings market begins turnaround with record-breaking start to 2025

NAI apollo: Frankfurt office lettings market begins turnaround with record-breaking start to 2025

• Take-up of 202,100 sqm represents one of the strongest Q1 results on record
• Banks, financial service providers and insurance companies dominate the market
• 58 % of take-up lies within the Central Business District
• Rise in vacancies is halted
• Increase in rents owing to large lettings in projects, new buildings and refurbishments: prime rent now at €51.50/sqm and average rent at €30.60/sqm
• Positive outlook for 2025: further major deals are close to completion; financial package from the new government will help boost demand for office space

Frankfurt am Main, 4 April 2025 – The Frankfurt office space market, including Eschborn and Offenbach-Kaiserlei, has started 2025 with a record-breaking first quarter that should mark the start of a turnaround following the low point that was reached at the end of 2024. According to NAI apollo, a member of NAI Partners Germany, take-up of 202,100 sqm by tenants and owner-occupiers was recorded in the first three months of 2025. This is only double the figure for the same quarter of the previous year but also more than twice the average for the last ten first quarters (Q1 2015 - Q1 2024: 98,100 sqm). “In the past, such a positive result has only been recorded in the traditionally stronger closing quarters, most recently in the years 2017 to 2019 with 181,200 sqm to 279,400 sqm. It now seems that the Frankfurt office market has cut the Gordian knot,” said Martin Angersbach, Director Business Development Office Germany at NAI apollo.

“The new federal government’s future investment programme, the so-called finance package, also promises to provide impetus for the Frankfurt office market owing to the high correlation between GDP development and take-up of office space. The expected measures go far beyond an anti-cyclical financial policy; rather, structural problems are to be tackled here. Government spending on investments will also lead to an expansion of private consumption, reflected by a further increase in demand and production. For the Frankfurt office property market, the greatest effect is likely to come from the positive economic development, which coincides with the highest vacancy rate in the last 10 years. In this respect, the first quarter can be seen as the beginning of the market’s recovery. Following recent large lettings, further major deals are about to be finalised," said Dr Konrad Kanzler, Head of Research at NAI apollo.

“The positive trend is also evident from the number of deals. While lettings reached a low point of 96 in the same quarter of the previous year, 117 deals were concluded in the first three months of 2025. This confirms that momentum has picked up in the first quarter of 2025, and the result is not just based on a few large lettings,” said Michael Preuße, Head of Office and Retail Letting at NAI apollo. At the same time, the volume of lease renewals following active market research was significantly below the previous year’s figure of 64,000 sqm at 18,000 sqm.

Increases are registered in all size categories

The market recovery was evident in all size classes in the first three months of 2025. While there was a threefold rise in the 2,501-5,000 sqm and 10,000-sqm-plus clusters, the increase in the other size categories was between 23 % and around 68 %. “The forward deals signed for the entire 73,000 sqm ‘Central Business Tower’ project by Commerzbank and for 32,000 sqm in the new 16-storey HPQ Offices in the “Hafenpark Quartier” by ING Germany had a significant impact on the market,” said Kanzler.

Banks, financial service providers and insurance companies shape market recovery

‘Banks, financial service providers and insurance companies’ are by far the most important users of space with a total of 111,200 sqm. Next are ‘law firms, notaries and legal services’ with 20,000 sqm and ‘construction and real estate’ with 13,300 sqm. The biggest deals also influence the distribution of take-up by location. The main Central Business District (CBD) accounted for 116,200 sqm of take-up, which corresponds to 58 % of the total volume. In the submarkets, the highest take-up was recorded by the banking district with 83,800 sqm, the Ostend-East submarket with 43,000 sqm, the city centre with 17,500 sqm and Westend with 13,700 sqm.

Prime rents near record level

A total of 65 % of lettings took place in projects, new buildings and refurbishments, including premium properties in prime locations such as Commerzbank’s leasing of the ‘Central Business Tower’ on the corner of Neue Mainzer Strasse and Junghofstrasse. This resulted in a further noticeable rise in rents. At the end of the first quarter, prime rents stood at €51.50/sqm, corresponding to an increase of 8.4 % or €4.00/sqm compared to the previous year. This is also just €1.50/sqm short of the all-time high registered in 2001. The space-weighted average rent registered a year-on-year increase of 22.4 % or €5.60 to a record €30.60/sqm owing to the large and high-priced lettings. “Lettings that are still expected in the CBD are likely to boost rental prices in the coming quarters. Projects currently being marketed support this trend,” said Angersbach.

No increase in vacancies for the first time since Q4 2022

The increase in market-active vacancies on the Frankfurt office market was halted at the start of 2025. At the end of March 2025, around 1.24 million sqm were available to rent on the market at short notice. This means that the availability of space has fallen by 19,000 sqm in the last three months. Accordingly, the vacancy rate at the end of Q1 2025 stood at 10.7 %, down 0.2 percentage points compared to the end of 2024. However, vacancies still increased by 147,000 sqm or 1.2 percentage points compared to the beginning of 2024.

On the project planning side, no significant increase in vacancies is expected in the coming quarters. Based on current information, a total of 123,300 sqm of office space is likely to be completed in 2025. Of this, 73,400 sqm are currently still available on the market. Only 78,700 sqm are currently planned for 2026, of which only 39,600 sqm are still available to rent. “Although this takes additional pressure off vacancies, a shortage of high-quality, modern and ESG-compliant space is also foreseeable in the coming years,” said Kanzler.

Brighter outlook for 2025

“The Frankfurt office market appears to have returned to growth in the first three months of the year,” said Preuße. “In addition to the recent prominent major deals, the overall market momentum has picked up noticeably. Further searches for large spaces are supporting the market trend. Additional impetus for the office market is likely to come from the future German government’s planned investment programme. In this respect, the vacancy rate should continue to fall in the coming quarters. At the same time, the shortage of central and modern vacancies should lead to a stabilisation of rents at a high level and even force a further increase in rents.”