Surprisingly strong start to the year for the office real estate market

  • pbbIX index up for the fourth consecutive quarter, poised between recession and expansion


The German office real estate market continued to recover during the first quarter of 2022. The pbbIX real estate index rose for the fourth time in a row, ending the quarter at a level of -0.2 points. Accompanied by a steep wave of inflation, economic growth – in terms of real GDP – was weak in the first quarter, and it remains to be seen whether office markets can continue their upward trajectory. Initial effects were also felt in Q1 from Russia’s war of aggression on Ukraine: not only did the conflict exacerbate existing supply chain difficulties, the sharp increase in commodity and energy prices also gave rise to higher production costs for companies and affected private consumption.

Demand for high-quality office properties in prime locations continued in the rental market during the first quarter. Stable to marginally higher rents and low vacancy rates contributed to a positive start. Parallel to this, the German labour market continued to see positive development, with the number of people in employment even slightly surpassing the pre-pandemic level of early 2020. Without the trend towards working from home and the associated uncertainty regarding future requirements, demand for office space would certainly have been more pronounced in recent months.

At the same time, individual portfolio purchases and large transactions generated high turnover in the investment market. However, most of the transactions were initiated and concluded before the Ukraine war, so that the consequences of the hostilities did not yet impact transactions in the first quarter of 2022. 

The individual markets continue to present a rather mixed picture. Overall, however, they are hovering on the borderline between recession and expansion. After Berlin had already crossed the threshold out of recession last quarter, Frankfurt has now followed – while Cologne and Munich are still lagging behind for various reasons.

The complete report for the first quarter of 2022 is available at