To read this full article you need to be subscribed to Institutional Real Estate Europe
Green means go: With office space demand down, landlords and developers see green refurbishment as a key to survival
Think back to Europe, BCE — before the COVID era. On any given day, the average office was 70 percent full. Four years later, only 55 percent of those desks are occupied, according to research by Savills. With this trend showing no signs of slowing down, office tenants are cutting back. In Germany, for instance, the real estate and investment company Becken estimates that total office space needs are down by some 20 percent.
Not surprisingly, prospective tenants are becoming choosier about the space they do take up. “You can’t lease space in London at the moment that’s not best-in-class,” says Rowan Jenkins, a partner at developer Quadrant. “There’s an absolute oversupply of B grade space in London, and even the stuff that used to be called A grade is proving really hard to let.”
The problems go beyond simple supply and demand. Space not only has to look good; environmentally speaking, it also has to “be good”. Multinationals, in particular, are und