Anyone looking to rent new office space in Cologne needs either an enormous amount of luck or a great deal of money – or, ideally, both. This is because the vacancy rate in the city of the cathedral has reached record lows. The few remaining spaces have become exorbitantly expensive, and there is an almost dramatic imbalance between supply and demand.
Extremely low vacancy rates lead to record rents
Florian Schmidt, Head of the Office Property Division at Cologne-based specialists Greif & Contzen, is quoted in the trade press as saying: “On the Cologne market, the vacancy rate for office space has now fallen so far that the search for suitable properties has, in both senses of the word, become a question of price for prospective tenants.” In an analysis of the first three quarters of 2018 just published, the experts at Greif & Contzen present figures that show a significant worsening of the supply shortage and a considerable rise in prices. By the end of the year, the vacancy rate in Cologne is expected to fall to 2.7 per cent, further exacerbating the current situation.
Office rents in Cologne have been rising at an above-average rate since 2016 – and there is no end in sight to this trend. This is certainly also due to the fact that, so far in 2018, only 55,000 square metres of new office space has been built – a quarter less than the average over the past five years. Furthermore, Cologne is seeing a rise in its population and very strong economic indicators: North Rhine-Westphalia’s largest city remains a magnet for creative service providers, media companies and start-ups. Whilst in recent years former industrial brownfield sites on the right bank of the Rhine have been converted into office space, thereby satisfying at least part of the high demand, this potential has now largely been exhausted.
New office concepts are in demand
In many cases, companies have no choice but to look for new office concepts. Coworking spaces and business centres are frequently mentioned in this context – COLLECTION, too, will be opening a new business centre in Cologne next year: The new location will be called “Köln City Rudolfplatz” and is expected to be available to clients from the third quarter of 2019 in the newly built Wallarkaden. Dr André Helf, CEO of the COLLECTION Business Centre Group, hopes that this new centre will help alleviate the tight office space situation in Cologne: “We are, of course, aware of just how challenging the Cologne market is at present. Our new business centre will be situated in a prime city-centre location, with a magnificent view of the historic Rudolfplatz. Anyone interested can find out more on our website, where a rendering of the exterior is also available.”
Dr Helf emphasises that the COLLECTION Business Centre concepts – which have proven successful at the other five locations and are popular with customers – will also be implemented in Cologne: “Naturally, this also means that there will be no long-term contractual commitments if the customer does not wish to enter into them or cannot foresee the financial risks involved. The layout of the spaces will be tailored to tenants’ needs. In Cologne, too, we aim to offer co-working spaces and virtual offices. And we will also have quiet zones, meeting areas and conference rooms in Cologne, ensuring that suitable spaces are available for all scenarios that arise in day-to-day office life. As always, our clients will enjoy our five-star luxury atmosphere, combined with our usual discretion and the support of our trained staff, as well as the highest standards in the provision of office equipment and presentation technology. And all this at a very fair price.”
Flexibility is the key word
In Cologne, too, ‘flexibility’ will be the key factor – a quality that COLLECTION Business Centre has championed ever since the company was founded. Florian Schmidt of Greif & Contzen agrees: “Concepts that increase flexibility in terms of both working hours and space will continue to grow in importance.”
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