Frankfurt rent growth outpaces confidence as office boom ends

Frankfurt's office market ended 2025 with leasing volume close to 2019, record rents, and rising vacancy in peripheral submarkets. The 583,500 sqm of space turnover nearly matched the pre-pandemic result, but this masks underlying weakness.

According to local broker Blackolive's managing partner Kevin Nguyen, the 2025 result was remarkable, but he added that no further leases above 10,000 sqm closed in Q4 2025 and that the 2026 pace of mega-leases was unlikely to repeat.

The increase in lease count is equally notable. Frankfurt registered 606 leases as of October 2025, a 61% rise versus October 2023, and a 61% uplift year-on-year compared to 2024. Very large deals above 10,000 sqm increased 468% over two years and represented about one-third of total take-up. About 50% of leasing activity was concentrated in the Central Business District, driven heavily by signings in the banking district.

Three major leases shaped the year. Commerzbank leased about 73,000 sqm in the Central Business Tower. KPMG Europe secured about 33,400 sqm across Park Tower and Opernturm. Allianz Global Investors signed for about 17,400 sqm in the Fürstenhof. Together, these leases exceeded 120,000 sqm, which Nguyen said demonstrated Frankfurt's continuing appeal as a financial centre. These were consolidation moves by existing occupiers, not expansion demand.

Quality, sustainability, and larger footprints remain the focus, even as firms look beyond the historic CBD core. Jack Wolfskin leased space in Mergenthaler in Eschborn. Deloitte signed near Europaviertel in RAW. ING-DiBa provided additional leasing momentum in Hafenpark Quartier in Frankfurt East.

Prime pricing holds — periphery doesn’t

Avison Young Market Intelligence researcher Christian Ströder bases 2026 forecasts on local IHK surveys in Munich, Hamburg, Berlin, Düsseldorf, and Frankfurt, stating that corporate investment and hiring plans are often reflected in office rental markets with a time lag. Yet Ströder admitted that hybrid working and office-space downsizing after the pandemic weakened the historical correlation between IHK sentiment and leasing demand.

He noted that many companies are extending leases rather than signing new ones, that these extensions are not counted in take-up figures, and that this creates uncertainty in forecasting. Ströder said the 2025 surge in very large leases would not extend into 2026, adding that firms had become more restrictive on investment and hiring plans since summer 2024. "Companies have become much more restrictive in investment and personnel planning," he said.

Rents reached new records, even as vacancy continued to rise. Prime rent increased €4.50 in 2025 to €52.50/sqm/month. Average rent increased €6 to €31.50/sqm/month, driven by very large leases in premium locations. Nguyen predicts that scarcity of large, contiguous institutional-grade space will push rents in some buildings above €60/sqm/month in 2026.

Vacancy is rising most in peripheral submarkets. Space available at short notice increased by about 100,000 sqm in 2025 to 1.52m sqm, lifting the vacancy rate to 13%. Frankfurt North and Niederrad recorded notable increases, while some submarkets logged small declines. Completions hit a historic low of 56,000 sqm in 2025, offering limited near-term relief to space supply. Blackolive expects 115,000 sqm of new office space in 2026, most already pre-let.

For office investors and lenders, the data present a clear market signal. Premium towers defend pricing and liquidity through scarcity and rising rents, while peripheral stock faces vacancy pressure and obsolescence risk. Most 2026 supply is already pre-committed, sustaining scarcity for institutional-grade assets. Underwriting for 2026 will split between durable income towers and assets facing faster depreciation, reshaping portfolio risk and lending exposure across Frankfurt's office sector.