Demand for flexible workspace continues to grow across Germany, up 47% year-on-year, following an ongoing shift to agile working practices.
The rapid increase in demand in the flexible office market is being driven by the secondary cities of Hanover, Hamburg, Dusseldorf, Stuttgart, and Leipzig. Leipzig, located an hour outside of Berlin, is emerging as a new business hotspot as it sees a 196% year-on-year increase in demand for flex space.
Across Germany, there has been an 11% increase in flex supply, with supply in Germany’s secondary cities failing to keep pace with the rapid increase in demand. The imbalance between supply and demand, coupled with inflationary pressures and spiraling energy costs, is pushing up prices in cities across the country.
Demand in these cities is expected to continue as companies compete for graduate talent and look to rationalise office footprints in the face of recessionary pressures, with rates forecast to grow by up to 10% in 2023.
To date, the markets of Stuttgart, Frankfurt, and Leipzig have struggled to keep pace with diversification in the office sector and increased demand for flexible workspace. Without substantial inward investment to support growth and boost flexible workspace provision, rates are set to continue rising.
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