Something is happening in the Frankfurt office lettings market. If market rumours are to be believed, Commerzbank wants to move into the Central Business Tower, which is currently under construction.

Neither the bank nor Helaba wanted to comment on the rumoured negotiations, which real estate analysts Green Street first reported. ING-DiBa is also interested in a new building in Ostend, reports the FAZ. DekaBank only recently moved from the Trianon high-rise to the new „Four“ ensemble of four high-rise buildings (on the former Deutsche Bank site) in the city centre.

All of this fits in with a fundamental development: banks and other financial service providers are focussing on high-quality space to offer their employees an attractive workplace. Services sector companies are also trying to push back against the home office as the main workplace. The office should once again be the place where employees meet, and where ideas are developed and exchanged. Ultimately, the idea is that employees are more productive this way than when they work alone at home.

And yes, there is some truth to this, as the author can confirm from his own experience. In October 2024, the WM Group, to which Börsen-Zeitung belongs, also moved into freshly renovated premises in Frankfurt's Ostend district that were adapted to our needs. But that's central: the workplace has to be equipped with modern facilities, and floor kitchens that offer a wide selection of drinks and are indispensable as meeting points. There are also additional „islands“ between the offices, sound proof telephone booths and so on. On top of this, the location must be conveniently located, i.e. easily accessible by public transport in particular. Good shopping facilities in the immediate vicinity complete the state-of-the-art office.

Office space in prime locations offers all of this in top quality. Suat Kurt, Branch Manager at JLL Frankfurt, is quoted in the latest report on the Frankfurt office lettings market as saying that demand remains high and rents are rising. Accordingly, he expects a take-up of around 450,000 m² in 2025. That would be significantly more than in 2024 when just 370,600 m² was taken up. In a 15-year comparison, however, it is still an extremely low figure. According to the agent's data, it was only lower in 2020.

Last year there was a shortage of major deals. By far the largest was that of the European Central Bank, which rented 34,100 m² in the „Gallileo“ office tower. This was followed by the construction group Strabag, which intends to use around 10,000 m² of the „Seed“ office building in Frankfurt's Europaviertel district. According to the website, the building being constructed by Strabag itself is scheduled for completion in June 2027. JLL counted a total of 500 deals in 2024. That is twelve fewer than in the previous year. Two-thirds of these were in the „less than 500 m²“ size category.

Figures from BNP Paribas Real Estate show the trend towards top quality space in central and well-connected locations. According to the data, 56% of last year's take-up was accounted for by city centre and city fringe zones. Modern office space had a market share of 80%. However, modern not only means state-of-the-art technical equipment but also ESG compliance. For large, international companies in particular, this is now an indispensable criterion when choosing a location.

Of course, this „flight to quality“ has its price. The prime rent is quoted by BNP Paribas Real Estate at a stable EUR 49.00/m². Occasionally, deals at more than 50.00 euros/m² have been registered, as confirmed by JLL. The average rent at the end of the year was 23.60 euros/m². The vacancy rate is around 10%.

JLL manager Kurt expects the vacancy rate to fall slightly in 2025. „The large-scale requests from the financial sector alone add up to almost 150,000 m²., and if all of these actually make it across the finish line this year, 2025 could be a really good year for lettings," he says.

By contrast, the Frankfurt investment market for offices looks puny. According to JLL, the volume in 2024 almost doubled compared to 2023 to around 670 million euros. But this is extremely low in a long-term comparison, since Frankfurt is traditionally the German office location par excellence.

The total investment market for Frankfurt (including living, logistics-industrial, office and retail only had a volume of EUR 1.8 billion for the year. An increase of 17% compared to 2023, but this figure was nonetheless 77% below the long-term average.

Market observers expect slightly higher transaction volume in 2025, though according to the JLL manager, the market is still in a consolidation phase. „It will take some time and, above all, a more positive economic outlook before the investment market gets rolling again. But 2025 will definitely be better than 2024,“ Kurt is convinced.

There are hardly any new project developments. This is because banks are still putting the brakes on financing. „BaFin's pressure on the banks is having an effect,“ said Florian Schwalm, Managing Partner of EY Real Estate, during an online presentation on 15 January. The supervisory authority sees office property as a risky investment, and is therefore demanding higher capital backing from the banks. Schwalm pointed out that BaFin does not differentiate between city centre locations and outlying locations. He therefore does not expect „more stable conditions“ again until the end of 2026 or even 2027. For projects in the three-digit million euro range, developers would have to have a lot of equity and high pre-letting rates.