The current economic situation and ongoing global uncertainties have left their mark on Cologne’s office space market. In its latest market report, Greif & Contzen Immobilien GmbH is taking a look at the developments and trends in the cathedral city’s office space market. The report describes an evolving market in the process of consolidation that is characterised by both challenges and opportunities.

The German economy has been struggling for the past three years: global crises and high energy prices brought about inflation and economic stagnation. These circumstances continue to have an impact on the demand situation in Cologne’s office space market. Take-up of space remains below average, due to hesitant decision-making and a more cautious overall approach to investment. Nevertheless, a number of large units were taken up in the first half of 2025, especially in the new-build segment, and the total of 110,000 square metres of space taken up corresponds to an 83 percent increase compared to the first half of 2024. This development shows that there is still some market activity involving users needing large units, and these include both public facilities and big corporations.

Increase in vacant space not critical at this point
An increase in vacant space could be observed in Cologne in recent months. The vacancy rate excluding space offered for sub-letting is currently around 5.2 percent, or 5.5 percent if space available for sub-letting is included. For comparison: in 2005, five years after the dotcom bubble had burst, Cologne’s vacancy rate stood at 8.6 percent and was therefore much higher than now. The rate recorded in Cologne is also lower than is the case in many of Germany’s other top 7 locations, such as Munich, Düsseldorf and Frankfurt. Vacancy rates of over 10 percent have meanwhile been reported for Düsseldorf and Frankfurt. Most of the vacant space in Cologne is located in existing buildings, giving rise to a greater supply of space that is available at short notice. Some vacant space can by now be found in new builds, too, which were completed very recently and are still in mint condition. As a general rule, construction projects are rarely begun without pre-letting of a large share of the space that is to be built.

Users’ stronger negotiating position dampens rents
The increase in vacant space has a dampening effect on rents. Prospective tenants can currently benefit from a better negotiating position, and the 2024 prime rent of 35 euros per square metre is unlikely to be realised this year. The current prime rent (according to gif) is 34.00 euros per square metre. Present-day market conditions are relatively favourable for those interested in renting in terms of their negotiating position, and this makes Cologne a rather attractive location for businesses who are looking for a flexible and slightly more cost-efficient solution.

Outlook: more positive market development from 2026 onwards
The economic outlook for Cologne is mixed but promising. The IFO business climate index reflects a positive trend that is backed by the latest economic forecasts. Experts expect the economy to recover in 2026, provided that the announced political measures are in fact realised and that there is no escalation of customs-related conflicts or the crisis in the Middle East. Market participants anticipate that the recovery will set in over the course of 2026. Market conditions are expected to stabilise in the second half of 2025, and a slight decrease in rents appears likely.

Opportunities for investors and tenants
Cologne’s office space market continues to offer opportunities for investors and tenants, despite the current challenges. The increase in vacant space and moderate development of rents produce a situation that is attractive for companies that are looking for suitable office space to match their current and future requirements. At the same time, market development will remain closely linked to general macroeconomic conditions. The property experts from Greif & Contzen expect the market to stabilise over the next few years and to eventually grow again in the long run. They do, however, point out that all of this depends to a high degree on the realisation of the announced political measures for promoting economic recovery as well as on a stable global economy.