The office market is increasingly behaving like a two-tier system. 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 least. 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 in the market.
A backbone located outside
