Greif & Contzen analyses how AI affects demand for office space in Cologne / Decrease in take-up in the first half of 2026

The quick spread of artificial intelligence (AI) is having an ever greater impact on the working world. Gains in efficiency and productivity are promised by systems such as large language models (LLMs), which are AI applications that produce text, analyse data, write code or prepare translations. This does not only open up opportunities for companies, but it also gives rise to the question of how demand for office space will be affected on the long run.

The real estate experts from Greif & Contzen Immobilienmakler GmbH have explored this development as part of their latest analysis of Cologne’s office space market. They came to the conclusion that while AI will likely have a noticeable impact on Cologne’s office space market in the future, no considerable AI-related changes in demand for space can be demonstrated at this point. “The technology is spreading rapidly and will transform many work processes. However, we cannot observe any measurable impacts of AI in Cologne’s office space market to date. Use of AI in companies is still too new, and the technology has not yet been sufficiently integrated into many business processes,” says Dr. Jan Schubert, Researcher of Greif & Contzen.

Increase in employment
The number of employees in Cologne increased from around 606,000 to about 632,000 between 2022 and 2025. Additional jobs were created even in some industries that are highly exposed to AI where the related activities are comparably well suited for automation. Nevertheless, a possible loss of jobs due to AI is an issue that is by now a subject of frequent debate.

In the office space market there have, however, been only a few cases so far where companies reduced the size of their premises due to an increased use of AI. “Potential impacts of AI are currently far less pronounced than other factors. These include the poor economic situation, geopolitical uncertainties, people working from home and general reluctance to invest that can be observed in many companies,” Andreas Reul, Head of the Office Properties Division of Greif & Contzen explains.

Cologne is in a good position but lacking positive impetus for now
The recent trend of technology companies renting office space in international tech hubs such as London and Paris, as well as in some large German cities including Munich and Berlin, is not reflected in Cologne to date. However, the region is in a good position for benefiting from a further spread of artificial intelligence in the future. Multiple research facilities, a lively start-up scene and new computing centre projects in the surrounding region provide for the essential conditions for AI-based business models. Cologne, too, is by now among Germany’s most important digital economy, research and data infrastructure centres.

“Positive growth scenarios facilitated by AI are possible in principle. In the short term, however, we expect to see an increase in efficiency and more critical scrutiny concerning the amount of space needed, rather than additional office space being let,” Andreas Reul says.

Weak first half of the year in Cologne’s office space market
Independent of the debate regarding AI, the anticipated recovery of Cologne’s office space market did not occur in the first half of 2026. Around 80,000 square metres of space were taken up, some 27 percent less than in the same period last year. This result was mostly due to a weak second quarter.

Many companies have been reducing the size of their premises or postponing any decisions in this regard. Among the biggest units let were around 7,000 square metres taken up by Deutsche Bank in the Dominium building and some 3,400 square meters in KölnTurm that were let to the insurance company MSIG. A considerable increase in vacant space could be observed at the same time. Around 509,000 square metres of office space are currently unoccupied. The vacancy rate is about 6.1 percent, or 6.5 percent if space available for sub-letting is included. This level is still considered unproblematic for the market, but it does put many tenants in a stronger negotiating position.

Incentives such as rent-free periods or – especially in older existing buildings – lower base rents are more frequently granted as a result. Nevertheless, the prime rent remained stable at about EUR 33.00 per square metre. The unweighted average rent decreased slightly to around EUR 17.90 per square metre.


Favourable situation for modern buildings, pressure on older ones
Some 75 percent of the around 85,000 square metres of new office space scheduled for completion in 2026 are already let. Around half of this new space is accounted for by revitalisation projects in which existing buildings are comprehensively modernised.

This segmentation of the market is going to intensify further, according to Greif & Contzen’s experts. Modern office space in urban neighbourhoods with efficient IT infrastructure are expected to remain sought after. Older buildings in peripheral locations that have not yet been refurbished are, on the other hand, likely to come under increased pressure.

Andreas Reul explains that “to find tenants in the future who are using AI intensively, landlords must offer a powerful digital infrastructure. Modernisation and technical upgrading are therefore becoming more and more important for owners of older existing buildings.”

Outlook
Greif & Contzen expects that less space will be taken up in 2026 in total than in the previous year. While it is still possible that large units are let, marketing processes tend to be quite lengthy. Vacant space is expected to increase further for the time being.

Rents in the premium segment are likely to remain largely stable. The scope for rent reductions is limited by high construction and financing costs here. A noticeable recovery of demand will only be possible if general economic conditions improve and if new growth stimuli are provided. The experts from Greif & Contzen are sure at this point that artificial intelligence is going to have an impact on the office space market but that the full extent will only show over the next few years.