Take-up in the top six office markets totalled approximately 2.47 million sq m during the first four “coronavirus quarters” (Q2 2020 to Q1 2021). This represents a decline of 35% compared with the three-year average. The largest collapse in take-up came in Düsseldorf with a decrease of 50%. Cologne witnessed the mildest impact although, also there, office take-up was 14% below the three-year average.

One of the occupier groups that has remained active is the public sector, which leased 232,600 sq m office space in the top six office markets between Q2 2020 and Q1 2021. This is 55% above the three-year average (149,200 sq m). In contrast, many private companies have put their leasing ac-tivity on ice for the time being, or at least reduced it, particularly in finance and insurance as well as in the manufacturing sector (both - 65%). The lower take-up figures are a reflection of the uncer-tainty of many occupiers. Certain sectors and companies are faced with economic challenges and cannot yet estimate when and to what extent their business will recover. Even more significant is the question as to what impact remote working will have on future working concepts and hence demand for office space.

Many occupiers are currently reticent particularly when it comes to large requirements. According-ly, letting activity has particularly declined in the larger size categories. In the smaller size category, the effects are less pronounced. Düsseldorf offers a clear example of this phenomenon. While let-ting activity in the large size category collapsed by 82%, the small size category actually registered a 4% increase in office take-up compared with the three-year average.

Letting activity is only likely to increase again once the end of the pandemic is on the horizon. We currently expect activity to rise markedly in the second half of 2021. Nevertheless, the projected take-up of 2.67 million sq m will only be moderately higher than that over the last twelve months (2.47 million sq m).

It is still too soon to speak of a normalisation of office market activity. This will only occur once there is more clarity as to the role of remote working following the end of the pandemic. Initial survey findings show that the majority of desk workers would like to have this option at least a few days per week (see also: Yesterday, at the office. Today, at home. And tomorrow?). The actual pro-portion of such personnel will vary from company to company and will depend, among other vari-ables, on the extent to which employees can impose their wishes on the company management.

However, it is already apparent that many occupiers are intensively reconsidering their workplace concepts and space requirements. This may well result in them leasing more suitable space or in conversion works to their existing space. A high level of activity on the occupier side could well, therefore, be essential. Whether overall demand for office space would then be higher, lower or unchanged compared with pre-COVID times cannot be foreseen at present. If many occupiers ob-serve a long-term decrease in the utilisation of their office space, this will also reduce their office space requirements in the medium term. On the other hand, the need for more communication and meeting spaces could offset the lower requirement for desk workstations at least to some ex-tent. If employees become more flexible in their choice of working location, additional smaller of-fices could start to appear in residential locations. This, too, could have a stabilising effect on over-all demand for space. In conclusion, the office market will undergo changes. However, when and to what extent activity will increase appreciably again and, in particular, how much space will be re-quired going forward, still remains to be seen.