Press Release: Frankfurt Office Rental Market Completes U-Turn with Record-Breaking Start to 2025

  • Sales area of 202,100 square meters, one of the strongest first quarters ever recorded
  • Banks, financial service providers, and insurance companies dominate market activity.
  • 58 percent of revenue in the Central Business District vacancy increase stopped
  • Rent increase due to large leases in projects, new builds and revitalizations: top rent now at 51.50 Euros per square meter and average rent at 30.60 Euros per square meter
  • Positive Outlook for 2025: More Major Deals Nearing Completion, New Government's Financial Package to Boost Office Space Demand

Frankfurt am Main, April 1, 2025

The Frankfurt office market, including Eschborn and Offenbach-Kaiserlei, has started 2025 with a record-breaking first quarter. The turnaround should have been initiated after hitting a low point at the end of 2024. According to NAI apollo, a member of NAI Partners Germany, a volume of 202,100 square meters was recorded in the first three months of 2025 through leases and owner-occupiers. This not only more than doubled the previous year's quarter but also the average of the last ten first quarters (Q1 2015 – Q1 2024: 98,100 square meters). „Such a positive result has only been recorded in the past in the traditionally stronger fourth quarters, most recently between 2017 and 2019 with 181,200 to 279,400 square meters. This seems to untie the gordian knot for the Frankfurt office market,“ says Martin Angersbach, Director Business Development Office Germany at NAI apollo, about the current result.

„The new federal government's future investment program, the so-called financial package, also promises to be a driver for the Frankfurt office market due to the high correlation between GDP development and office space take-up. 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 increase in private consumption, which will be reflected in a further increase in demand and production. For the Frankfurt office real estate market, the greatest effect is likely to come from the positive economic development, which will be accompanied by the highest vacancy rate in the last 10 years. In this respect, the first quarter can be seen as the start of the market recovery. Following the recent large lettings, further major deals are about to be finalized,“ explains Dr. Konrad Kanzler, Head of Research at NAI apollo.

„The positive development is also evident in the number of deals. After reaching a low point with 96 rentals in the previous year's quarter, 117 deals were closed in the first three months of 2025. This confirms that the first quarter of 2025 was characterized by greater momentum and was not solely based on a few large rentals,“ explains Michael Preuße, Head of Office and Retail Letting at NAI apollo. At the same time, the volume of lease renewals after active market sounding, at 18,000 square meters, is significantly below the previous year's figure of 64,000 square meters.

All size classes characterized by increases

The market recovery is evident across all size classes in the first three months of 2025. While clusters between 2,501 and 5,000 square meters and those above 10,000 square meters saw a threefold increase, other size classes experienced growth ranging from 23 to around 68 percent. „The market was shaped by the project leases of the entire ‚Central Business Towers‘ with 73,000 square meters by Commerzbank, as well as 32,000 square meters in the new 16-story HPQ Offices in the ‚Hafenpark Quartier‘ by ING Germany,“ said Kanzler.

Banks, financial service providers, and insurers shape market recovery

Carried by this, the „Banks, Financial Service Providers, and Insurance“ sector represents by far the most important demand for space with a total of 111,200 square meters. Following this are „Law Firms, Notaries & Legal Advisors“ with 20,000 square meters and the „Construction & Real Estate Industry“ with 13,300 square meters. The largest transactions are also reflected in the spatial distribution. The prime location of the Central Business District (CBD) accounts for a turnover of 116,200 square meters, which corresponds to 58 percent of the total volume. Among the secondary submarkets, the banking location with 83,800 square meters, the Ostend-East submarket with 43,000 square meters, the city center with 17,500 square meters, and the Westend with 13,700 square meters show the highest turnovers.

Top rents approach record high

A total of 65% of lettings took place in projects, new buildings and revitalizations, including premium properties in prime locations, such as the completion of Commerzbank's „Central Business Tower“ on the corner of Neue Mainzer Strasse and Junghofstrasse. This has led to a further noticeable increase in rent levels. At the end of the first quarter, prime rents stood at EUR 51.50 per square meter. This corresponds to an increase of 8.4 percent or EUR 4.00 per square meter compared to the previous year. This means that only EUR 1.50 per square meter is still missing from the historic high of 2001. The area-weighted average rent recorded a year-on-year increase of 22.4% or EUR 5.60 to a record EUR 30.60 per square meter due to the large and high-priced lettings. „Rentals still expected in the CBD are likely to boost the rental price trend in the coming quarters. Projects currently being marketed are supporting this trend,“ explains Angersbach.

Since Q4 2022, no increase in vacancy for the first time

The increase in market-active vacancy in the Frankfurt office market has stopped at the beginning of 2025. Thus, around 1.24 million square meters will be available for rent on short notice in the market at the end of March 2025. This means that space availability has decreased by 19,000 square meters in the last three months. Accordingly, the vacancy rate at the end of the first quarter of 2025 is 10.7 percent, a decrease of 0.2 percentage points compared to the end of 2024. However, compared to the beginning of 2024, there is still an increase of 147,000 square meters or 1.2 percentage points.

From a project development perspective, no significant increase in vacancy is expected in the coming quarters. According to current knowledge, a total of 123,300 square meters of office space are expected to be completed in 2025. Of this, 73,400 square meters are currently still available on the market. For 2026, only 78,700 square meters are currently planned, of which only 39,600 square meters are still available for rent. „While this eases pressure on vacancy rates, a shortage of high-quality, modern, and ESG-compliant spaces is also foreseeable in the coming years,“ says Kanzler.

Brightened Outlook for 2025

„The Frankfurt office market appears to be returning to a growth path at the start of the year,“ says Preusse. „In addition to the recently outstanding large transactions, overall market dynamics have noticeably accelerated. Further large-scale inquiries are supporting market development. Additional momentum for the office market is likely to follow from the planned investment program of the future federal government. In this respect, vacancy should prospectively continue to decline in the coming quarters. At the same time, a shortage of central and modern available space should lead to a stabilization of rents at a high level and even force a further increase in rental prices.“.