Refurbishment of offices - what is the status?
Around a third of office space in the seven A cities is in need of refurbishment. But things are happening - especially where rents are high. This is shown by the first apoprojekt stock compass.
Around 70 % of office space in Germany's A-cities was built before 2000 and often no longer meets current ecological and social requirements. For apoprojekt, we analysed office properties and projects that were or will be completely refurbished between 2019 and 2026. The result is the first edition of the apoprojekt portfolio compass, which from now on will present refurbishment activities in the office markets of A-cities every six months.
Despite the crisis, prime rents in the centres of the A-locations are currently decoupling from the rental price trends in other locations. They are rising or remain at a high level and are consistently above the EUR 30/sqm mark. The most expensive city centres are Munich at EUR 51.50/sqm, followed by Frankfurt/Main (EUR 46.50/sqm) and Berlin (EUR 44.50/sqm). It is therefore not surprising that central locations are the first choice for refurbishments - this is where most space is currently being refurbished at 1.7 million sqm (67%).
In general, things are not looking bad: While only 10 % of all project developments in 2019 were refurbishments of existing buildings, this figure is currently around 19 %, with a share of over 30 % expected in both 2025 and 2026 according to the current analysis. Between 2019 and 2026, around 2.5 million sqm of office space was or will be refurbished in the A cities; 1.25 million sqm of this has already been completed.
Interestingly, almost 40% of the refurbishment volume is currently under construction, including major projects such as the 55,000 m² refurbishment of the Deutsche Bundesbank headquarters in Frankfurt.
Due to postponed new construction projects and the growing focus on existing properties, an increase in refurbishments is expected for 2025 and 2026 - particularly in central locations and for owner-occupied buildings. In the long term, ‘manage-to-green strategies’ will continue to drive refurbishment activity.
Note: You can download the press release and the study free of charge from the apoprojekt website.
Contact: Nicole Tietze, Senior Consultant in the office property sector at bulwiengesa, tietze@bulwiengesa.de
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