- Large lettings of more than 5,000 m² are possible again
- Prime rents are still too low to justify speculative new construction
(Essen, 24 January 2023). The vacancy rate in Essen’s office market rose to just over 7% in 2022. This was not due to weaker demand for office space. Office take-up in the city stabilised at around 130,000 m² in 2022 compared with previous years. Rather, strategic decisions by companies such as RWE, Eon/Innogy and ALDI released space that they had previously leased from third parties. Most of this space is in average condition and can be let again after modernisation to current standards.
For prospective tenants in Essen, this means a significantly larger choice than in previous years. Large lettings of more than 5,000 m² of contiguous space are possible again. “With vacancy at around 3%, large lettings were virtually impossible, and some companies had to move to neighbouring cities such as Mülheim. Now that companies have vacated space, we can offer our clients more alternatives again—provided the owners invest in their properties,” reports Tobias Altenbeck, member of Brockhoff GmbH’s management team.
The repositioned G1 office tower at Gildehofstraße 1/1a, directly beside Essen Central Station and owned by Ashtrom Properties Germany GmbH, is one of the existing buildings where RWE’s departure has released much-needed space. “Being within walking distance of the station is an unbeatable advantage. The owner is also investing in the space in consultation with new tenants. This is exactly the kind of space in demand, and it is quickly absorbed by the market,” explains Altenbeck, whose team has the exclusive mandate to market the 15,000 m² tower. The first letting was completed last year: service provider snt-regio leased 2,719 m² of refurbished space. Brockhoff is in discussions with several prospective tenants for the remaining 9,000 m².
Prime rents in Essen’s office market are rising moderately. In top locations, refurbished existing buildings and new developments achieve €13–14/m². This is an increase on previous years, but remains below the expectations of developers and investors. “We still see too few cranes in Essen. The vacant space now available in existing buildings will be re-let quickly if owners are prepared to invest. Then we will once again face low vacancy and strong demand,” Altenbeck predicts.
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About Brockhoff
Brockhoff GmbH is Germany’s largest locally based commercial property broker and a market leader in the Ruhr region. The owner-managed company, headquartered in Essen, was founded by Eckhard Brockhoff in 1987. With more than 35 years of real estate experience, it offers extensive expertise in marketing OFFICE, INVEST, RETAIL and LOGISTICS properties. Its portfolio includes the nationwide sale of office and investment properties; office lettings, particularly in the Ruhr region; retail property transactions in 1A prime locations in German towns and cities of all sizes; and the letting and sale of logistics properties. In 2021, SORAVIA, a leading property group in Austria and Germany with more than 3,300 employees, acquired a 41% stake in the company through its subsidiary ADOMO.