JLL's Victor Prime Office performance indicator showed an alignment of office property prices with current market conditions for the second quarter of 2026. After a period of seven quarters with stable to slightly positive developments, the indicator's standing for prime locations in the German metropolitan areas of Berlin, Düsseldorf, Frankfurt, Hamburg and Munich fell by three percent to 169.2 points at the end of June 2026 compared to the first quarter. This decline was caused by increased yields across all locations, which could not be offset by positive impulses from the letting markets.
Mr Ralf Kemper, Head of Value and Risk Advisory at JLL Germany, explained that the observed change reflects current pricing in a still subdued investment market for office properties. Findings from transactions and bidding processes in recent months confirmed a higher yield level, after a necessary yield adjustment had already become apparent in previous quarters. Consequently, yields in Berlin, Düsseldorf, Frankfurt and Hamburg each increased by 20 basis points, and in Munich by ten basis points compared to the previous quarter.
Mr Kemper noted that sales of significant office buildings, such as those in Frankfurt's banking district or in Düsseldorf, influenced the yield adjustments. These properties are among the higher-end stock in preferred locations. For state-of-the-art, ESG-compliant prime properties in sought-after office locations, relatively high prices and thus low initial yields are still occasionally achieved. However, the number of negotiations leading to a successful conclusion remains low, and many transactions are cancelled by sellers due to insufficient bids.
The cumulative transaction volume for office properties in the five cities mentioned remained stable at just over EUR 1 billion compared to the previous quarter. In the first half of 2026, over EUR 2 billion were thus invested in office space in these cities. This volume represents an increase of 24 percent compared to the very low level of the corresponding period last year. The situation in the occupier markets was different: the office letting market developed stably in the first half of 2026, with take-up in the five cities slightly exceeding the figure for the first half of 2025 (1.19 million square metres) at over 1.21 million square metres.
Mr Kemper emphasised that the letting markets proved to be, and are likely to remain, anchors of stability. This is primarily evident in the high-quality segment, i.e., in prime locations and for prime products, where letting agreements show stable or even rising rents. Although the overall market in many places faces rising vacancies, a contrary trend was observed in the absolute premium segment: vacancy rates in the prime locations of Germany's five A-cities covered by the Victor indicator fell slightly in the second quarter of 2026 and remain at a very low level. This development illustrates an increasing polarisation of the market. While second and third-tier properties face structural challenges, demand for prime office space in the best locations remains robust. Occupiers are focusing on high-quality, modern and sustainable work environments, which explains the resilience of the premium segment.
The individual locations showed different indicator changes in the second quarter of 2026. Berlin recorded the most significant decline with minus 4.7 percent to 174.3 points, followed by Hamburg with minus 3.8 percent to 192 points. In both cities, positive rental effects could barely compensate for yield increases of 20 basis points each. In Frankfurt am Main and Düsseldorf, positive impulses from the letting market mitigated the yield influences. In Frankfurt, the increase in prime rent by EUR 3 to now EUR 55 is particularly noteworthy. The index declined less sharply there: in Frankfurt by 2.8 percent to 148.30 points, in Düsseldorf by 2.5 percent to 153.9 points.
Munich once again proved to be the most stable market among the German A-cities with a decline of only 1.7 percent to 191.2 points. This is due not only to the below-average increase in prime yield of just ten basis points but also to positive rental price developments. Due to the quarterly result, the annual performance across all locations (comparison of indicator standing Q2 2026 to Q2 2025) also turned negative, recording a decline of 0.4 percent. Hamburg remains in positive territory with an annual performance of 3.8 percent, thanks to the result of the fourth quarter of 2025 (6.6 percent). Düsseldorf still achieved 0.5 percent. The other cities show a year-on-year value decrease of 0.2 percent in Munich, 1.9 percent in Frankfurt and 2.9 percent in Berlin. Munich stands out in the quarterly comparison; the Bavarian capital recorded several large transactions, some in the triple-digit million euro range, such as the sale of the Prinzregentenplatz property by a major German institutional investor. The transaction volume was thus above the quarterly average of the past 14 quarters since the volume collapse in the first quarter of 2023, totalling almost EUR 550 million in the first half of 2026, putting Munich in the top position.
