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Frankfurt Central Business District
Frankfurt's office market has just produced two headlines that appear to describe different cities. Prime rents in the Central Business District reached €55 per square metre during the second quarter of 2026 — a new all-time high, surpassing even the peak of the dotcom boom. At the same time, office take-up during the first half of the year fell to just 150,300 square metres, the weakest half-year performance since the Covid shock of 2020. Vacancy has climbed to 11.6%, leaving 1.32 million square metres of office space standing empty.
Both figures are correct. Their coexistence tells us something important not only about Frankfurt, but about the direction of Germany's office market as a whole. Rather than moving through a conventional recovery, Germany's office market is becoming increasingly selective. Nowhere is that more visible than in Frankfurt.
The city has effectively split into two distinct markets. Within the Central Business District — Bankenlage, Westend, Stadtmitte and Finanzviertel West — demand for modern, ESG-compliant buildings remains robust, genuinely prime space is scarce and rents continue to climb. That relatively small part of the city accounted for almost 57% of all office transactions during the first half of the year.
Outside that premium segment, however, the picture changes dramatically. Average rents across Frankfurt have fallen by more than 10% to €28.20 per square metre, creating a gap of almost €27 between average and prime rents. Older buildings in secondary locations are becoming progressively harder to lease without substantial refurbishment. According to NAI apollo, lettings above 5,000 square metres collapsed by around 85% compared with the first half of last year. Aside from DZ Bank's owner-occupier acquisition of the Fifty Avon building, not a single transaction above 10,000 square metres was completed. The largest letting of the second quarter was Fraport's lease of 6,000 square metres at The Squaire at Frankfurt Airport.
Previous comparisons also flatter the market. The first half of 2025 was heavily influenced by two exceptional pre-lettings — Commerzbank's commitment to the entire Central Business Tower and ING's new headquarters at Ostbahnhof — together accounting for more than 100,000 square metres. Those transactions briefly created the impression that Frankfurt had turned the corner. In retrospect, they increasingly resemble exceptional events rather than the beginning of a broader recovery.
When Frankfurt falls behind
The investment market tells a remarkably similar story. According to JLL, Frankfurt recorded investment transactions of only €530 million during the first half of 2026, another 20% below an already weak first half of last year. By contrast, Hamburg's investment market expanded by almost 60%, while Cologne and Düsseldorf both recorded growth of more than 35%.
That contrast matters. JLL's broadly optimistic assessment of Germany's investment market conceals a widening divergence beneath the headline figures. Activity is gradually returning across much of the country. Frankfurt continues to move in the opposite direction.
The collapse of the proposed sale of Frankfurt's Opernturm earlier this year illustrates why. One of Germany's best-known office towers attracted considerable market attention yet ultimately failed to change hands, underlining how difficult it remains to establish pricing for large prime office assets. Frankfurt's subdued investment volume therefore reflects more than a shortage of buyers. It reflects a market in which buyers, sellers and lenders have yet to converge on what many flagship office buildings are actually worth.
That in turn has made genuine price discovery increasingly difficult. With relatively few landmark office transactions taking place, valuations remain anchored as much by expectation as by market evidence, prolonging the stand-off between buyers seeking further price adjustments and sellers reluctant to crystallise losses.
Ulrich Höller, managing partner at ABG Real Estate Group and a long-time veteran of the Frankfurt office market, believes financing itself is no longer the principal constraint. "There is currently too little capital flowing into the market as such; interest rates are less of a problem," he told Immobilien Zeitung. The challenge is assembling the combination of equity and debt required for very large office acquisitions. "Years ago, the investment volume had to be large, and now three-digit transaction volumes are quickly seen as too high." His assessment remains cautious: the market for major office transactions is still "a year, perhaps two" away from reopening fully, although one or two landmark deals could restore confidence.
The obstacle, he suggests, is now as much one of psychology as finance. German institutional investors continue to manage legacy portfolios while many international investors remain prepared to wait for further repricing before committing fresh capital.
Yet the most revealing statistic in JLL's own report is almost hidden from view. Buried beneath its generally optimistic assessment of the national investment market is an estimate that Germany faces a refinancing gap of around €5 billion across 2026 and 2027. Frankfurt, with its concentration of large office assets, complex financing structures and institutional ownership, is likely to shoulder a disproportionate share of that burden. Decisions postponed today will not remain postponed indefinitely.
More than a Frankfurt story
The vacancy overhang reinforces the longer-term challenge. Despite relatively modest new construction, vacant office space continues to rise. Developers and owners are increasingly examining residential conversion as one possible outlet, encouraged by KfW grants introduced in July. Yet conversion remains commercially viable for only a limited proportion of existing buildings. Floorplates, building depth and fire safety requirements frequently make adaptation uneconomic. Conversion may relieve pressure at the margin, but it is unlikely to absorb anything like Frankfurt's existing surplus.
The consequences are now extending beyond landlords, investors and developers. Even the advisory businesses whose revenues depend on market activity are beginning to adapt to Frankfurt's prolonged slowdown. Property consultancy Aengevelt has recently replaced its full Frankfurt branch with a representative office, integrating more functions into its Düsseldorf headquarters while maintaining a slimmed-down local presence. It is a modest corporate decision, but also a telling reminder that prolonged illiquidity eventually reshapes the businesses that exist to facilitate transactions, not merely the market itself.
The headline rent of €55 per square metre is entirely real. So too are the weakest leasing figures since the pandemic, rising vacancy and subdued investment activity. These are not contradictory signals. They are symptoms of a market whose demand has become concentrated in an increasingly narrow segment while much of the remaining office stock struggles to establish a new economic purpose.
Frankfurt has become the clearest illustration yet of what an increasingly selective office recovery actually looks like. Prime buildings continue to attract occupiers, investors and record rents. Beyond that relatively small circle, liquidity remains scarce, price discovery incomplete and refinancing pressures unresolved. The city's office market has not simply slowed; it has acquired a fundamentally different shape. For investors across Germany, that may prove to be Frankfurt's most important message.