Impact of the coronavirus pandemic: Will there be less demand for office space post-coronavirus and due to working from home? Has the coronavirus pandemic and the associated focus on remote working and working from home caused lasting damage to Cologne as an office location? What are the future prospects for the Cologne office market?
Cologne has come through the coronavirus crisis relatively unscathed, thanks in part to its strong economic performance in recent years and the diversity of industries located in the city. Since 2020, the vacancy rate in Cologne's office market has risen again after reaching a historic low of around 2.5 percent in 2019 in the wake of the coronavirus pandemic. However, this will not have a lasting negative impact on the development of the Cologne office market, but rather offers opportunities for companies.
Despite the effects of the coronavirus pandemic, Cologne remains a sought-after office location, with an expected increase of an additional 25,000 employees by 2030even if working from home becomes more established in the future, the overall demand for office space will not decrease. Even if working from home becomes more established in the world of work in the future, the overall demand for office space will not decrease – but rather undergo structural change. The trend is toward a flexible office space structure that adapts to the individual needs of industries and companies.
"Even though the forecast for the coming years looks good, it is important that we continue to identify and secure potential for new office locations in the future. This will enable Cologne to continue offering attractive and modern office space and secure jobs in the future," explains Dr. Manfred Janssen, Managing Director of Cologne Business Development.
A large part of the future space requirement (approx. 735,000 m²) can be covered by numerous construction projects planned for 2030, mainly in the districts of Ehrenfeld/Braunsfeld, Ossendorf, Mülheim, and Deutz. Despite positive forecasts for the coming years, however, further office space will be needed in Cologne in the longer term, which is why it will be particularly important in the future to identify and secure potential for new office locations – in competition with the equally urgent need for residential construction.
"Even though the forecast for the next few years looks good, it is important that we continue to identify and secure potential for new office locations in the future. This will enable Cologne to continue offering attractive and modern office space and secure jobs in the future," explains Dr. Manfred Janssen, Managing Director of CologneBusiness Economic Development.
A large part of the future space requirement (approx. 735,000 m²) can be covered by numerous construction projects planned for 2030, mainly in the districts of Ehrenfeld/Braunsfeld, Ossendorf, Mülheim, and Deutz. Despite positive forecasts for the coming years, however, further office space will be needed in Cologne in the longer term, which is why it will be necessary in the future to identify and secure potential for new office locations, in competition with the equally urgent need for residential construction.
What does Larbig & Mortag Immobilien say about the study?
The analysis results of the study by KölnBusiness are consistent with the market observations of the research department at Larbig & Mortag. These also indicate an increase in office space supply after 2019 and see a peak in 2022/2023. This situation is being driven by the additional office space currently coming onto the market from new leases, subleases, and vacated space. Overall, however, supply remains below the fluctuation reserve of 5 percent that is important for a large city.
Due to the population growth forecast for the next 10-15 years, the demand for jobs will also rise. The Cologne office space market will only be able to meet this demand to a limited extent with the space currently available. In addition, Larbig & Mortag sees competition from important residential construction as a further brake on the development of office and commercial space. In the long term, rents in Cologne will therefore continue to stabilize and average rents will continue to rise.
"The study by bulwiengesa on behalf of KölnBusiness shows a positive trend for the office market in the coming years. We share this assessment based on our own research. You can view the results in our latest office market report," says Uwe Mortag, Managing Director of Larbig & Mortag.
*The analysis results are based on an office space requirements analysis conducted by the independent analysis and consulting firm bulwiengesa (on behalf of KölnBusiness Wirtschaftsförderung). The analysis highlights the development of the office market in Cologne up to 2030.
