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Demand for energy-efficient office space in Frankfurt is growing
Vacancy of office space in Frankfurt continues to grow. Brokerage houses see weak demand for energy-efficient properties. Find out more about the current development.
Demand for energy-efficient office space in Frankfurt is growing
The brokerage houses in Frankfurt are recording weak demand for office space, which can be attributed to the ongoing economic development. Although a slightly higher take-up of space was recorded in the first quarter of 2024 compared to the previous year, this was mainly due to a major deal in which the European Central Bank rented the entire Gallileo high-rise at Gallusanlage with 36,800 square meters of rental space. However, apart from this deal, there were only a few deals in downtown Frankfurt.
The number of new rentals has fallen again and many companies are choosing to remain in their current premises during uncertain times. There were approximately 96 new rentals in the first quarter, which is the lowest level since 2012. During this period, lease extensions were also carried out for office space totaling around 64,000 square meters, which is four times more than in the same quarter of the previous year.
Vacancy in Frankfurt continues to rise, with 9.2 percent of office space in Frankfurt, including Eschborn and Offenbach-Kaiserlei, now available short-term, according to CBRE. This means an increase of 1.3 percentage points compared to the same quarter of the previous year. According to forecasts, the vacancy rate could continue to approach the ten percent mark, which would mean that around one in ten square meters of office space would be available at short notice.
One reason for the increasing vacancy rate despite low new construction activity is that the current office supply often does not meet the requirements. There is a demand for smaller, modern and environmentally friendly offices in a central location. Companies are willing to pay higher rents for such space and reduce their office space in the process.
Brokerage houses such as JLL and Nai Apollo are therefore calling for more new construction and revitalization of older office buildings in order to meet the need for modern, sustainable office space. Energy-efficient offices are particularly in demand, as demand for such space is increasing worldwide. In Frankfurt there is a lot of catching up to do in this area, which is increasing the pressure on construction activities and property modernization.