The office market is increasingly behaving like a two-tier system, writes Wolfgang Roeck, CEO of WÖHR + BAUER. At one end, a relatively small pool of best-in-class assets in prime locations continues to attract attention, capital and premium rents. At the other end, a much larger stock that no longer meets today’s technical, energy-related or functional requirements sits in district and secondary locations.
In recent months, industry commentators have often implied that this group of secondary locations are a dead end. But that conclusion is too simplistic — in Germany’s case at any rate. Secondary locations are not the problem by default. In many cities, they hold the fundamentals that occupiers and investors still need, such as connectivity, a functioning urban environment, a deep labour catchment and, crucially, economic viability. Where demand, quality and affordability can be aligned, these areas can become some of the most compelling investment destinations i
