LOW DEMAND MOMENTUM, PARTICULARLY IN Q2
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At the end of the first half of the year, take-up on the Cologne office market totaled around 76,000 sqm. This means that the result remains significantly below both the strong previous-year figure (-34%) and the long-term average (-37%). The weak result reflects the overall subdued economic environment, volatile geopolitical developments and structural changes on the demand side. At present, a noticeable reluctance can be observed for searches of 500 sqm and above, which is additionally slowing market activity.
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Following a comparatively solid start to the year with 45,000 sqm in the first quarter, momentum weakened noticeably in the second quarter. At 31,000 sqm, letting activity was significantly lower. The five largest lease agreements of the first half of the year were all registered in the first quarter. No letting above 1,000 sqm was concluded in the second quarter, underlining the weak momentum in the large-space segment. At the same time, letting processes have lengthened noticeably, as decision-making and contract conclusion processes are taking significantly more time.
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Over a twelve-month period, the average rent increased by around 8% to €20.90 per sqm. By contrast, the prime rent for high-quality office space in top locations remained stable and currently stands at €33.50 per sqm.