What do you know about the city of Essen? For us, it is one of the most interesting tier-two locations in Germany – and not just because this is where we will open our fifth branch next February! Its office market is the most important one in the Ruhr, and the parameters for property developers are sound. Rents and prices on the housing market have seen substantial growth since 2012.

Essen is the second-largest city in the Ruhr and, with more than 590,000 residents, the ninth-largest in Germany. It is also the biggest centre of employment, with around 75 % of its roughly 330,000 gainfully employed persons holding down social security-covered jobs. The city’s economic development is dynamic, with predictable consequences for its housing market. For a long time, the situation on Essen’s housing market was balanced or even relaxed. Things started to shift in 2012, when the population rebounded from years of decline and began to grow noticeably. But since the pace of housing construction activity did not pick up until 2018, a growing housing shortage is being felt here just like in many other German cities.

A look at the office market illustrates the brisk dynamic of Essen’s economic development. Within the Ruhr, Essen actually represents the most important office market. Vacancies have been eliminated lately, and will be somewhere between 3.0 % and 3.5 % within a year’s time – meaning, the vacancy rate will already undercut the level considered a healthy residual supply. The take-up of 2019 is likely to top the record level of 2007 with a total of 158,000 sqm. This puts Essen in the very top segment among Germany’s Class B cities.

The modest floor space supply, combined with the lively demand for space, improves the parameters for property developments, of course, and the well-filled project pipeline suggests as much. Moreover, co-working providers like Design Offices have now warmed to the city of Essen as a great place for their purposes. This has also to do with the structure of the certain resident players: Essen is home to either the head office or a branch office of three DAX-listed companies, ThyssenKrupp, E.ON, RWE, and of other renowned companies such as Hochtief, Brenntag, Deichmann, Aldi Nord, Funke Media Group and Schenker.

In short: In terms of residential, office or other asset classes, Essen is an alternative investment destination with considerable potential. For in-depth information—not just on Essen but on the housing markets in all of the 21 A- and B-Class cities—we recommend our Residential Market Reports. For more details on the subject (in German), visit our website.

Contact persons: Felix Embacher, Division Head Residential at bulwiengesa, embacher [at] bulwiengesa.de, Oliver Rohr, Project Manager for Office Real Estate at bulwiengesa, rohr [at] bulwiengesa.de